SECOND TERM

SY 2021-2022

CHAPTER 3: R.A.
9520 COOPERATIVE
CODE OF THE
PHILLIPINES 2008

Management/ Administration
of Cooperatives

References:
• RA 9520
• CDA Dagupan ppt 1
RA 9520
Signed by the President into law on February
17, 2009 and effective fifteen (15) days after
its publication in the Official Gazette or in a
newspaper of general circulation (March 7,
2009)

The following discussions present the new

provisions in RA 9520 as compared to RA 6938

2
NEW PROVISIONS IN RA 9520

Representative Assembly means the full

membership of a body of representatives
elected by each of the sectors, chapters or
district of that cooperative duly assembled for
the purpose of exercising such powers lawfully
delegated unto them by the general assembly in
accordance with its bylaws;

MC 2011-12 | Members of the Local Election

Committee Under the Representative Assembly
Termed as Election Deputies

3
NEW PROVISIONS IN RA 9520
 Officers of the Cooperatives shall include
the members of the board of directors,
members of the different committees created
by the general assembly, manager or chief
executive officer, secretary, treasurer, and
members holding other positions as may be
provided for in their cooperative

4
NEW PROVISIONS IN RA 9520

MC 2011-04 | Legal Interpretation of

Article 42 of the RA9520
• Officers of the Cooperative as provided
under Art. 5 (11) of RA9520:
• Officers elected by the General Assembly

• Officers appointed by the Board of Directors

5
NEW PROVISIONS IN RA 9520
RELATIONSHIP BY CONSANGUINITY
First Degree: Parent to Child
Second Degree: Grandparent to Grandchild,
Brother to Sister
Third Degree: Uncle to child, aunt to child,
Great grandparents to
Great grandchild
RELATIONSHIP BY AFFINITY
First Degree: Parent-in-Law to Daughter/ Son-in-Iaw
Second Degree - Brother-in-Law to Sister-in- Law
Third Degree - Great-Grandparent-in-Iaw to Great,
Granddaughter/Great Grandson-in-Law,Uncle/Aunt
in- law to Niece/Nephew in- law

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NEW PROVISIONS IN RA 9520
 Social Audit is a procedure wherein the
cooperative assesses its social impact and
ethical performance vis-a-viz its stated
mission, vision, goals and code of social
responsibility for cooperatives to be
established by the Authority in consultation
with the cooperative sector
 Enables the cooperatives to develop a process whereby it can
account for its social performance and evaluate its impact in
the community and be accountable for its decisions and actions
to the regular members;

MC 2013-16 | Guidelines on Social Audit of

Cooperatives |Social Audit Tools
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NEW PROVISIONS IN RA 9520
Performance Audit shall refer to an audit on the
efficiency and effectivity of the cooperative as a
whole; its management and officers; and its
various responsibility centers as basis for
improving individual, team or overall
performance and for objectively informing the
general membership on such performance

 MC 2013-15 | Performance Report Standards for

Cooperatives
 MC 2013-18 | Submission of Performance and Social
Audit Reports

8
NEW PROVISIONS IN RA 9520

Subsidiary Cooperatives refers to any organization all

or majority of whose membership or shareholders come
from a cooperative, organized for any other purpose
different from that of, and receives technical,
managerial and financial assistance, from a
cooperative, in accordance with the rules and
regulations of the Authority

 MC 2013-09 | Policy on Networth Requirement for the

Organization of a Subsidiary Cooperative Pursuant to Section 2
(2), Rule II of Rules and Regulations Implementing Certain
Provisions of R.A. 9520

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NEW PROVISIONS IN RA 9520
ORGANIZATION AND REGISTRATION
 Completed a Pre-Membership Education
Seminar (PMES)
 Newly organized primary coop may only be
registered as an MPC after compliance with
the minimum requirements for MPCs to be
set by the CDA
 Submission of Economic Survey with staffing
pattern which includes at least a bookkeeper
 Articles of Cooperation
 At least 15 members of legal age
 Minimum Capitalization of PhP 15,000

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NEW PROVISIONS IN RA 9520
ORGANIZATION AND REGISTRATION
 CDA to periodically assess the required paid-
up capital of coops and may increase it every
five (5) years when necessary upon
consultation with the cooperative sector and
National Economic Development Authority
(NEDA) (Guidelines to be drafted)
 Any merger, consolidation and division of
cooperatives require 3/4 affirmative votes of
all members with voting rights present and
constituting a quorum

11
NEW PROVISIONS IN RA 9520
ORGANIZATION AND REGISTRATION
 MC 2011-07 | Organizational Structure of
Cooperatives under RA 9520
 MC 2010-05 | Policy Guidelines in the Mandatory
Amendments of Articles of Cooperation and By-
Laws of Cooperatives and Prescribing the
Registration Thereof to Conform with RA 9520
 MC 2009-02 | Guidelines in the Issuance of New
Certificate of Registration Under the Philippine
Cooperative code of 2008 (RA9520)
 MC 2009-01 | Guidelines for the Re-Registration
of Cooperatives

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NEW PROVISIONS IN RA 9520
TYPES OF COOPERATIVES
 FromRA 6938 six (6) types: Credit, Consumers,
Marketing, Producer, Service, and Multi
Purpose
 ToRA 9520 types namely: Credit,
Consumers, Marketing, Producer, Service, Multi
Purpose, Advocacy Cooperative, Agrarian
Reform Cooperative, Cooperative Bank, Dairy
Cooperative, Education Cooperative, Electric
Cooperative, Financial Service Cooperative,
Fishermen Cooperative, Health Services
Cooperative, Housing Cooperative, Transport
Cooperative, Water Service Cooperative Workers
Cooperative, and others
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NEW PROVISIONS IN RA 9520
TYPES OF COOPERATIVES
 MC 2011-15 | Revised Guideline for the Registration of Primary
Cooperatives
 MC 2011-18 | Revised Guidelines in the Registration of
Cooperative Federation and Union
 MC 2011-17 | Policy and Guidelines on the Establishment of
Cooperative Branch
 MC 2012-17 | Policy Guidelines for the Establishment of
Cooperative's Satellite Office
 MC 2012-14 | Guidelines for the Registration of Small-Scale
Mining Cooperative
 MC 2012-13 | Guidelines for the Registration of Health Service
Cooperatives
 MC 2012-12 | Revised Guidelines in the Registration of Labor
Service and Workers Cooperatives
 MC 2011-25 | Policy Guidelines on Job Contracting Worker
Service Cooperative
 MC 2011-24 | Policy Guidelines on Workers Cooperatives
14
NEW PROVISIONS IN RA 9520
MEMBERSHIP
 Legal age, Filipino citizen
 An associate member who meets the minimum
requirements of regular membership, continues
to patronize the cooperative for two (2) years,
and signifies to remain a member shall be
considered a regular member

 MC 2012-16 | Policy Guidelines Prescribing the Minimum

Information in the Membership Registry of Cooperatives

15
NEW PROVISIONS IN RA 9520
INELIGIBLE OFFICER
 All elective officials are ineligible to be
officers or directors of a cooperative except a
party-list representative being an officer of a
cooperative he/she represents

 MC 2012-19 | Prohibition on the Election and Appointment of

Elective Officials as Officers of the Cooperative

16
NEW PROVISIONS IN RA 9520
FEDERATION
 To carry on coop enterprise that complements,
augments or supplements but does not conflict,
compete with, nor supplant the business or
economic activities of its members.
 Registered cooperatives may organize a federation
according to the type of business activity which they
are engaged in
GRIEVANCE COMMITTEE
 The general assembly may opt to create an appeal or
grievance committee to serve for one (1) year to
decide on appeals on membership application; and if
they fail to decide within thirty (30) days upon
receipt thereof, the appeal is deemed approved in
favor of the applicant 17
NEW PROVISIONS IN RA 9520
ADMINISTRATION
 The general assembly may by 3/4 votes of all its
members with voting rights present and constituting a
quorum, delegate some powers to a representative
assembly
 Written notices to regular meetings shall be sent in
writing, by posting or publication or through other
electronic means to all members of record
 Notice to special meetings to be sent 1 week prior to
the meeting to all members entitled to vote

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NEW PROVISIONS IN RA 9520
ADMINISTRATION
 Voting in primary cooperatives is strictly one-member
- one vote no proxies allowed except for
representative assembly
 Quorum shall consist of 25% of all the members
entitled to vote. However in case of coop banks,
quorum shall be as provided in Art. 99 of the Code;
In electric coops, 5% of all members entitled to
vote unless otherwise provided in the by-laws

19
NEW PROVISIONS IN RA 9520
BOARD OF DIRECTORS
 The BOD are responsible for strategic planning,
direction-setting and policy- formulation
 Their term still not to exceed two (2) years but no
limitation as to number of consecutive terms to hold
office
 Prohibition against holding any other position
involved in day-to-day operations and management
 Disqualification of persons engaged in business
similar to the cooperative
 Additional committees (Committee & Officers)
 Mediation and Conciliation
 Ethics
 Gender and Development

Members of Audit and Election Committees shall be elected by the

general assembly, and the rest shall be appointed by the board
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NEW PROVISIONS IN RA 9520
COMMITTEE , OFFICERS, MANAGEMENT
 MC 2013-22 | Guidelines on Mainstreaming Gender
and Development (GAD) in Cooperatives
 Accountant or bookkeeper is responsible for
maintenance and safekeeping of books of accounts
 Audit committee responsible for continuous and
periodic review of books of accounts; monitor
adequacy and effectiveness of management’s control
system and audit the performance of the
cooperative
 Audited financial statements required to be posted
in principal office
 MC 2012-09 | Policy Clarification Re-Accountable
Officers

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NEW PROVISIONS IN RA 9520
ANNUAL REPORTS
 Filed within 120 days from the close of the calendar year
 Should include regular activities including socio-civic
undertakings
 Must show their progress and achievements
 Liability for non-submission are commensurate fines and
penalties imposable until the cooperative has complied
TAXES
 Coops transacting with both members and non members
shall not be subject to taxes and fees imposed under NIRC
and other tax laws on their transactions with their
members
 Transactions of members with the coop shall not be
subject to taxes and fees, including final tax on
members’ deposits and documentary stamp tax
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NEW PROVISIONS IN RA 9520
CAPITAL
 Subsidies, donations, legacies, grants, and aids shall not
be divided into individual share capital holdings anytime
but subject to escheat proceedings upon dissolution
 Limitation on share capital held by one member reduced
from 20% to 10%
 By-laws to provide reasonable and realistic member
capital build-up program

 MC 2013-04 | Clarificatory Policy on Share Capital

 MC 2011-05 | Limitation on Share Capital Holdings

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NEW PROVISIONS IN RA 9520
TAX EXEMPTIONS
 Non-members will pay VAT; coop will collect and
remit to BIR
 25% of net surplus is returned to members as
interest and patronage refund
 Cooperative is responsible for collection and
remittance of individual withholding taxes (interest
on share capital)

ADDITIONAL PRIVILEGES
 Faculty cooperatives have right of first refusal in
management of canteen and other services related to
the operations of educational institutions
 Housing agencies and financial institutions shall
create a window for financing housing projects24
NEW PROVISIONS IN RA 9520
AUDITS
 Financial audit conducted by external auditor in
good standing with PICPA and accredited by Board
of Accountancy and CDA
 Social and performance audits may be conducted
internally by audit committee, paid staff, volunteer
members, or by qualified external auditors

SOCIAL AUDITING
 Based on the 7th Cooperative Principle – Concern for
Community
 “the systematic review and appraisal of the cooperative in
relation to the development of its most essential building
blocks-its members, its people, and its distinctive
contribution to the development of its community and
society as a whole”. 25
NEW PROVISIONS IN RA 9520
DISTRIBUTION OF NET SURPLUS
 Provide at least ten (10%) for the reserve fund.
Provided that, in the first five (5) years after
registration, the reserve fund shall not be less than
fifty percent (50%) of the net surplus
 Provide not more than 10% for CETF; half may be
spent by the coop for education and training while
other half may be remitted to the federation/union
chosen by the cooperative;
 The federation/union chosen shall submit to the CDA:
(a) list of contributing cooperatives;
(b) business consultancy assistance with its nature and
cost; and
(c) training activities specifying the nature,
participants, and cost of each activity

26
NEW PROVISIONS IN RA 9520
DISTRIBUTION OF NET SURPLUS
 Not less than 3% for community development fund for
projects/activities that will benefit the community
where the cooperative operates
 Not more than 7% for optional fund, land and
building, and other funds
OTHER PROVISIONS
 Special Provisions for:
 Transportation Cooperatives
 Electric Cooperatives
 Cooperative Banks
 Credit Cooperatives
 Financial Service Cooperatives

 Housing Cooperatives
 CDA allowed to formulate rules on certain provisions of
the Code
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NEW PROVISIONS IN RA 9520
OTHER PROVISIONS
 Mediation and Conciliation Committee to facilitate
settlement of intra-coop disputes & among members,
officers etc. before submitting the case to CDA for
voluntary arbitration (procedure in accordance with
ADR Act of 2004)
 Joint Congressional Oversight Committee on
Cooperatives to review and approve the implementing
rules and regulations of the Code and monitor proper
implementation
MC 2010-07 | Guidelines on the Procedure for Voluntary
Arbitration in the Cooperative Development Authority (CDA)
MC 2013-21 | Revised Guidelines Governing the Conduct of
Conciliation-Mediation Proceedings Before The Cooperative
Development Authority (CDA)
MC 2013-20 | Revised Guidelines Governing The Conduct of
Conciliation-Mediation Proceedings At The Primary and
Union/Federation Level
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NEW PROVISIONS IN RA 9520
OTHER PROVISIONS
Additional Penal Provisions:
 Liability of public officials or employees of any
government agency who deprive, diminish, hinder or
restrict coops from the full employment of their
privilege under Article 60 & 61 of the Code
 The CDA may motu proprio, initiate complaints
against person(s), organizations using the word
“cooperative” not duly registered as a coop under
the Code
 The coop or any of its members can file a case
against any officer or employee of the Bureau of
Internal Revenue (BIR) or of any other government
agency with the Ombudsman, Civil Service
Commission, other appropriate government agency
or the courts of law

29
NEW PROVISIONS IN RA 9520
OTHER PROVISIONS
ADDITIONAL PENAL PROVISIONS
Offenses punishable by a penalty of imprisonment of not less
than 1 year nor more than 5 years or a fine not more than
P50,000 or both:
 Providing information, reports or other documents to the
CDA that are required under this Code which the person
knows to be false or misleading
 Omission or refusal to furnish any information, report or
other document that is required under the Code
 Making an entry required under the Code in a book or
register, which the person knows to be false or misleading
 Hindering an authorized person from making an inspection,
audit, examination or investigation required under the
Code
 Failure to comply with an order or written instructions
issued or given by the CDA
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NEW PROVISIONS IN RA 9520
OTHER PROVISIONS
 Re-registration of all cooperatives within one (1) year
from effectivity of this Code to confirm their status
by submitting: (a) Certificate of
Registration/Confirmation; (b) Articles of
Cooperation; (c) by-laws; and (d) latest audited
financial statement
 Must secure Certificate of Tax Exemption from BIR
(valid for 5 years from issue) following the issuance of
the new Certificate of Registration

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NEW PROVISIONS IN RA 9520
STATUS OF AMMENDMENTS
 The amended provisions shall be applicable only after
the confirmation of the coops’ status thru their re-
registration under the New Code.
 MC 2011-20 | Guidelines on the Registration of Amendment
of Articles of Cooperation and By-laws By Substitution

IRR APPROVAL, IMPLEMENTATION & MONITORING

 Joint Congressional Oversight Committee on

Cooperatives to review and approve the
implementing rules and regulations of the Code
and monitor proper implementation

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 For more readings on RA9250
https://lawphil.net/statutes/repacts/ra2009/ra_9520_2009.html