Share

Model By Laws - Federation

CDA by laws for federation

Your Browser Doesn't Support Canvas. Showing the Text Content of the PDF Instead: Revised March2012

BY-LAWS
OF
_________________________________________________________
KNOW ALL MEN BY THESE PRESENTS:
We, the undersigned duly authorized representative(s) of our
respective cooperatives, all of legal age and Filipino citizens, have on this day
voluntarily
agreed to organize a
(Secondary/Tertiary)
federation of
cooperatives, do hereby adopt the following By-laws.
Article I
Purpose/s and Goals
The purpose/s and goals of this Federation are those set forth in its
Articles of Cooperation.
Article II
Membership
Section 1.
members.

Membership.

This Federation shall have _________________

Section 2. Qualification for Membership - The membership of this
Federation is open to any registered ___________________________________,
within the common bond of membership.
Section 3. Requirements for Membership.
A member must have complied with the following requirements:
a. Approved application for membership;
b. General Assembly Resolution indicating membership and share
capital contribution to this Federation;
c. Board of Director Resolution on authorized representative;
d. Certification of line of business activities engaged in;
e. Subscribed and paid the required minimum share capital and
membership fee; and
f. ___________________________________________________________
Section 4. Application for Membership. An applicant for membership shall
file a duly accomplished form to the Board of Directors who shall act upon
the application within _________ (_____) days from the date of filing. The
Board of Directors shall devise a form for the purpose which shall, aside
from the profile of the applicant cooperative, include the duties of an affiliate
to participate in all programs including but not limited to capital build-up,
patronizing the businesses and services and savings mobilization of the
federation and, such other information as may be deemed necessary.
The application form for membership shall include an undertaking to
uphold the By-laws, policies, guidelines, rules and regulations promulgated
by the Board of Directors and the general assembly. No application for
membership shall be given due course if not accompanied with a
membership fee of ____________________ (Php _____), which shall be refunded
to the applicant cooperative in case of rejection.

Page 1 of 20

Revised March2012

Section 5. Appeal. An applicant cooperative whose application was denied
by the Board of Directors may appeal to the Appeal and Grievance
Committee or the general assembly by giving notice to the Secretary of the
federation within thirty (30) days upon receipt of the decision.
Section 6.
Minimum Share Capital Requirement.
An applicant
cooperative for membership shall subscribe at least __________ ( ) shares
and pay the value of at least __________
shares upon approval of its
membership.
However, no affiliate shall own or hold more than Ten
percent (10%) of the total subscribed share capital of the Federation.
Section 7. Duties and Responsibilities of Affiliates. Every affiliate shall
have the following duties:
a. Pay the installment of its share capital subscription as it falls due
and to participate in the capital build-up and savings mobilization
activities of the federation;
b. Patronize the Federation’s businesses and services;
c. Participate in the membership education programs;
d. Attend and participate in the deliberation of all matters taken
during general assembly meetings;
e. Observe and obey all lawful orders, decisions, rules and regulations
adopted by the Board of Directors and the general assembly;
f. Remit the Cooperative Education and Training Fund (CETF) due to
the Federation/Union; and
g. Promote the purposes and goals of the Federation, the success of
its business, the welfare of its affiliates and the cooperative
movement in general.
Section 8. Rights and Privileges of Affiliates. An affiliate shall have the
following rights and privileges:
a. Attend through authorized representative during general
assembly meetings;
b. Avail the services of the Federation, subject to certain conditions
as may be prescribed by the Board of Directors;
c. Inspect and examine the books of accounts, the minutes books,
the share register, and other records of the Cooperative during
reasonable office hours;
d. Secure copies of Federation records/documents pertaining to
the account information of the concerned member; and
e. Such other rights and privileges as may be granted by the
General Assembly.
Section 9. Affiliate Entitled to Vote. Any regular member who meets the
following conditions is a member entitled to vote:
a. Paid the membership fee and the value of the minimum shares
required for membership;
b. Not delinquent in the payment of its share capital subscriptions
and other accounts or obligations;
c. Not violated any provision of cooperative laws, CDA
administrative issuances, Articles of Cooperation and this Bylaws, the terms and conditions of the subscription agreement;
and the decisions, guidelines, rules and regulations promulgated
by the Board of Directors and the general assembly;
d. Completed the continuing education program prescribed by the
Board of Directors;
e. Remitted the Cooperative Education and Training Fund (CETF)
due to the Federation/Union and

Page 2 of 20

Revised March2012

f. Participated in the affairs of the Federation and patronized its
businesses in accordance with the policies and guidelines.
Failure of the member to meet any of the above conditions shall mean
suspension of voting rights subject to the declaration of the board of
directors until the same has been lifted upon the determination of the latter.
Consequently, a member entitled to vote shall have the following
additional rights:
a. Participate and vote on all matters deliberated upon during
general assembly meetings;
b. Seek any elective or appointive position, subject to the
provisions of this By-laws and the Philippine Cooperative Code
of 2008; and
c. Such other rights and privileges as may be provided by the
General Assembly.
Section 11. Liability of Affiliates. An affiliate shall be liable for the debts
of the Federation only to the extent of his subscribed share capital.
Section 12. Termination of Membership. Termination of membership may
be automatic, voluntary or involuntary, which shall have the effect of
extinguishing all rights of a member in the Cooperative, subject to refund of
share capital contribution under Section 14 hereof.
a. Automatic Termination of Membership. The dissolution or the
insolvency of an affiliate shall be considered an automatic termination
of its membership in the Federation.
b. Voluntary Termination. An affiliate may, for any valid reason,
withdraw his membership from the federation by giving a sixty (60)
day notice to the Board of Directors.
c. Involuntary Termination. An affiliate may be terminated by a vote of
the majority of all the members of the Board of Directors for any of the
following causes:
i. Has not patronized the services/businesses of the Federation as
provided for in its policies ;
ii. Has continuously failed to comply with its obligations as
provided for in the policies of the Federation;
iii.
Has violated any provision of this By-laws and the policies
promulgated by the board of directors of the Federation; and
iv. For any act or omission injurious or prejudicial to the interest
or the welfare of the Federation.
Section 13. Manner of Involuntary Termination. The Board of Directors
shall notify in writing the affiliate which is being considered for termination
and shall give them the opportunity to be heard.
The decision of the board of directors shall be in writing and shall be
communicated in person or by registered mail to said member and shall be
appealable within thirty (30) days from receipt thereof to the general
assembly whose decision shall be final.
Section 14. Refund of Share Capital Contribution. An affiliate member
whose membership is terminated shall be entitled to a refund of its share
capital contribution and all other interests in the federation. However, such
refund shall not be made if upon payment the value of the assets of the

Page 3 of 20

Revised March2012

Federation would be less than the aggregate amount of its debts and
liabilities exclusive of its share capital contribution. In which case, the
terminated affiliate shall continue to be entitled to the interest of its share
capital contributions, patronage refund and the use of the services of the
Federation until such time that all its interests in the Federation shall have
been duly paid.
ARTICLE III
Administration
Section 1. The General Assembly (GA). The general assembly is composed
of all the members entitled to vote, duly assembled and constituting a
quorum and is the highest policy-making body of the Federation.
Section 2. Powers of the General Assembly. Subject to the pertinent
provisions of the Cooperative Code and the rules issued thereunder, the
general assembly shall have the following exclusive powers which cannot be
delegated:
a. To determine and approve amendments to the cooperative Articles of
Cooperation and By-laws;
b. To elect or appoint the members of the board of directors, and to
remove them for cause;
c. To approve developmental plans of the cooperative; and
d. To delegate the following power/s to a smaller body of the Federation:
i.
ii.

___________________________________________
___________________________________________

Section 3. Meetings. Meetings of the general assembly, board of directors
and committees may be regular or special. All proceedings and businesses
undertaken at any meeting of the general assembly or Board of Directors, if
within the powers or authority of the Cooperative, there being a quorum,
shall be valid.
Section 4. Regular General Assembly Meeting. The General Assembly shall
hold its annual regular meeting at the principal office of the Federation or at
any place in the Philippines within ninety (90) days after the close of its
fiscal year.
Section 5. Special General Assembly Meeting. The Board of Directors may,
by a majority vote of all its affiliates, call a special general assembly meeting
at any time to consider urgent matters requiring immediate membership
decision. The Board of Directors must likewise call a special general
assembly meeting within one (1) month from receipt of a written request
from:
a. At least ten percent (10%) of the total number of affiliates entitled to
vote;
b. The Audit Committee; or
c. The Federation to which the Cooperative is an affiliate, or
d. Upon Order of the Cooperative Development Authority.
Section 6. Notice of Meeting. All notices of meetings shall be in writing and
shall include the date, time, place, and agenda thereof stated therein.
a. Regular General Assembly Meeting. Notice of the annual regular
general assembly meeting shall be served by the Secretary, personally
or his duly authorized representative, by registered mail, or by
electronic means to all affiliates of record at his last known postal
address, or by posting or publication, or through other electronic
Page 4 of 20

Revised March2012

means, at least one (1) week before the said meeting. It shall be
accompanied with an agenda, minutes of meeting of the last general
assembly meeting, consolidated reports of the Board of Directors and
Committees, audited financial statements, and other papers which
may assist the members to intelligently participate in the proceedings.
b. Special General Assembly Meeting. Notice of any special general
assembly meeting shall be served by the Secretary personally or his
duly authorized representative, by registered mail, or by electronic
means upon each members who are entitled to vote at his last known
postal address, or by posting or publication, or through other
electronic means, at least one (1) week before the said meeting. It
shall state the purpose and, except for related issues, no other
business shall be considered during the meeting.
c. Waiver of Notice. Notice of any meeting may be waived, expressly or
impliedly, by the affiliate concerned.
Section 7. Order of Business. As far as practicable, the order of business of
a regular general assembly meeting shall be:
a. Call to order;
b. Declaration/Consideration of presence of quorum;
c. Reading, consideration and approval of the minutes of the previous
meeting;
d. Presentation and approval of the reports of the board of directors,
officers, and the committees, including audited financial statements of
the Cooperative;
e. Unfinished business;
f. New business;
h.1
h.2
h.3
h.4

Election of directors and committee members
Approval of Development and/or annual Plan and Budget
Hiring of External Auditor
Other related business matters

g. Announcements; and
h. Adjournment
Section 8. Quorum for General Assembly Meeting. During regular or
special general assembly meeting, at least _____________ percent (_______%)
of the total number of affiliates entitled to vote shall constitute a quorum.
Section 9. Voting System. Only affiliates entitled to vote shall be qualified
to participate and vote in any general assembly meeting. An affiliate is
entitled to one basic vote and as many incentive votes but not to exceed five
(5) votes. The votes cast by the representative/delegate duly authorized shall
be deemed as votes cast by the affiliates.
The incentive vote shall be determined by the Board of Directors and
approved by the general assembly.
Election of Directors and Committee members shall be by secret ballot.
Action on all matters shall be in any manner that will truly and correctly
reflect the will of the membership.
ARTICLE IV
Board of Directors
Section 1. Composition of the Board of Directors (BOD).
Directors shall be composed of ___________ ( ) members.

Page 5 of 20

The Board of

Revised March2012

Section 2. Functions and Responsibilities. The Board of Directors shall
have the following functions and responsibilities:
a.
b.
c.
d.
e.
f.
g.
h.

i.

j.

Provide general policy direction;
Formulate the strategic development plan;
Determine and prescribe the organizational and operational structure;
Review the Annual Plan and Budget and recommend for the approval
of the GA;
Establish policies and procedures for the effective operation and
ensure proper implementation of such;
Evaluate the capability and qualification and recommend to the GA
the engagement of the services of the External Auditor;
Appoint the members of the Mediation/ Conciliation and Ethics
Committees and other Officers as specified in the Code and Federation
By-laws;
Decide election related cases involving the Election Committee and its
members in accordance with the Guidelines issued by the CDA, Art.
137 of Republic Act No. 9520, Memorandum Circulars issued by the
Cooperative Development Authority, Alternate Dispute Resolution Act
of 2004 and its suppletory laws;
Act on the recommendation of the Ethics Committee on cases
involving violations of Code of Governance and Ethical Standards in
accordance with the Guidelines issued by the CDA, Art. 137 of
Republic Act No. 9520, Memorandum Circulars issued by the
Cooperative Development Authority, Alternate Dispute Resolution Act
of 2004 and its suppletory laws; and
Perform such other functions as may be prescribed in the By-laws or
authorized by the GA;

Section 3. Qualifications. Any member who are entitled to vote and has
the following qualifications can be elected or continue as member of the
Board of Directors:
a.
b.
c.
d.
e.

Has paid the minimum capital requirement;
Has no delinquent account with the Federation;
Have continuously patronized the Federation services;
An affiliate in good standing for the last two (2) years;
Completed or willingness to complete within the prescribed period the
required education and training whichever is applicable; and
f. Other qualifications prescribed in the IRR of the Authority.
Section 4. Disqualifications. Any affiliate representative under any of the
following circumstances shall be disqualified to be elected as a member of
the Board of Directors or any committee, or to continue as such:
a. Holding any elective position in the government, except that of a party
list representative
being an officer of a cooperative he or she
represents;
b. The members of the board of directors holding other position directly
involved in the day-to-day operation and management of the
cooperative he/she represents;
c. Having direct or indirect personal interest with the business of the
Cooperative;
d. Having been absent for three (3) consecutive meetings or in more than
fifty percent (50%) of all meetings within the twelve (12) month period
unless with valid excuse as approved by the board of directors;
e. Being an official or employee of the Cooperative Development
Authority, except in a Federation organized among themselves;

Page 6 of 20

Revised March2012

f. Having been convicted in administrative proceedings or civil/criminal
suits involving financial and/or property accountability; and
g. Having been disqualified by law.
Section 5. Election of Directors. The members of the Board of Directors
shall be elected, by secret ballot, by the affiliates, who are duly authorized
representatives, who are entitled to vote during the annual regular general
assembly meeting or special general assembly meeting called for the
purpose. Unless earlier removed for cause, or have resigned or become
incapacitated, they shall hold office for a term of _______ ( ) years or until
their successors shall have been elected and qualified; Provided, that
majority of the elected directors obtaining the highest number of votes
during the first election after registration shall serve for two (2) years, and
the remaining directors for one (1) year. Thereafter, all directors shall serve
for a term of __________ ( ) years; The term of the cooperating directors shall
expire upon the election of their successors in the first regular general
assembly after registration.
Section 6. Election of Officer within the Board of Directors. The Board
of Directors shall convene within ten (10) days after the general assembly
meeting to elect by secret ballot from among themselves the Chairperson and
the Vice-Chairperson, and (to elect or) appoint the Secretary and Treasurer
from outside of the Board.
For committees elected by the General Assembly and/or appointed by
the BOD, procedural process of electing the Chairperson, Vice-Chairperson
or other positions among themselves should be in accordance with the
process mentioned above.
Section 7. Meeting of the Board of Directors. The regular meeting of the
Board of Directors shall be held at least once a month. However, the
Chairperson or majority of the directors may at any time call a special Board
meeting to consider urgent matters. The call shall be addressed and
delivered thru the Secretary stating the date, time and place of such meeting
and the matters to be considered. Notice of regular and special meetings of
the Board of Directors, unless dispensed with, shall be served by the
Secretary in writing or thru electronic means to each director at least two (2)
days before such meeting.
Majority of the total number of directors constitutes a quorum to
transact business. Any decision or action taken by the majority members of
the Board of Directors in a meeting duly assembled shall be a valid
cooperative act.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors by
reason of death, incapacity, removal or resignation may be filled-up by a
majority vote of the remaining directors, if still constituting a quorum;
otherwise, such vacancy shall be filled by the general assembly in a regular
or special meeting called for the purpose. The elected director shall serve
only for the unexpired term of his predecessor in office.
In the event that the general assembly failed to muster a quorum to fill
the positions vacated by directors whose term have expired and said
directors refuse to continue their functions on a hold-over capacity, the
remaining members of the Board together with the members of the Audit
Committee shall designate, from the qualified regular members of the
general assembly, their replacements who shall serve temporarily as such
until their successors shall have been elected and qualified in a regular or
special general assembly meeting called for the purpose.

Page 7 of 20

Revised March2012

If a vacancy occurs in any elective committee it shall be filled by the
remaining members of the said committee, if still constituting a quorum,
otherwise, the Board, in its discretion, may appoint or hold a special election
to fill such vacancy.
Section 9. Removal of Members of the Board of Directors and Committee
Members. All complaints for the removal of any elected officer shall be filed
with the Board of Directors and such officer shall be given the opportunity to
be heard. Majority of the Board of Directors may place the officer concerned
under preventive suspension pending the resolution of the investigation.
Upon finding of a prima facie evidence of guilt, the Board of Directors shall
present its recommendation for removal to the general assembly. An elective
officer may be removed by three-fourths (¾) of the regular members present
and constituting a quorum, in a regular or special general assembly meeting
called for the purpose. The officer concerned shall be given the opportunity
to be heard at said assembly. For this purpose, the Board of Directors shall
provide policy on suspension.
In cases where the officers sought to be removed consist of the
majority of the BOD, at least 10% of the affiliates with voting rights may file
a petition with the CDA, upon failure of the BOD to call an assembly meeting
for the purpose to commence the proceeding for their removal within thirty
(30) days from notice. The decision of the GA on the matter is final and
executory.
An officer appointed by the Board of Directors may be removed from
office for cause by a majority vote of all the members of the Board of
Directors.
Section 10. Prohibitions. Any members of the Board of Directors shall not
hold any other position directly involved in the day-to-day operation and
management of the federation nor engage in any business similar to that of
the cooperative or who in any way has a conflict of interest with it.
ARTICLE V
Committees
Section 1. Audit Committee. An Audit Committee is hereby created and
shall be composed of _________ ( ) members to be elected during a general
assembly meeting and shall hold office for a term of one (1) year or until
their successors shall have been elected and qualified. Within ten (10) days
after their election, they shall elect from among themselves a Chairperson,
Vice-Chairperson and a Secretary. No member of the committee shall hold
any other position within the Federation Cooperative during his term of
office. The Committee shall provide internal audit service, maintain a
complete record of its examination and inventory, and submit audit report
quarterly or as may be required by the Board and the general assembly.
The audit committee shall be directly accountable and
responsible to the General Assembly. It shall have the power and duty to
continuously monitor the adequacy and effectiveness of the federation's
management control system and audit the performance of the federation and
its various responsibility centers.
Section 2. Functions and Responsibilities. The Audit Committee shall:
a. Monitor the adequacy and effectiveness of the federations management
and control system;
b. Audit the performance of the federation and its various responsibility
centers;

Page 8 of 20

Revised March2012

c. Review continuously and periodically the books of account and other
financial records to ensure that these are in accordance with the
cooperative principles & generally accepted accounting procedures;
d. Submit reports on the results of the internal audit and recommend
necessary changes on policies and other related matters on operation
to the Board of Directors and GA;
e. Recommend or petition to the Board of Directors conduct of special
general assembly when necessary; and
f. Perform such other functions as may be delegated by the BOD or
authorize by the GA.
Section 3. Election Committee. An Election Committee is hereby created
and shall be composed of ________ ( ) members to be elected during a general
assembly meeting and shall hold office for a term of one (1) year or until
their successors shall have been elected and qualified. Within ten (10) days
after their election they shall elect from among themselves a Chairperson,
Vice-Chairperson and a Secretary. No member of the committee shall hold
any other position within the Federation during his term of office.
Section 4. Functions and Responsibilities. The Election Committee shall:
a. Formulate election rules and guidelines and recommend to the GA for
approval;
b. Implement election rules and guidelines duly approved by the GA;
c. Recommend necessary amendments to the election rules and
guidelines, in consultation with the Board of Directors, for approval of
the GA;
d. Supervise the conduct, manner and procedure of election and other
election related activities and act on the changes thereto;
e. Canvass and certify the results of the election;
f. Proclaim the winning candidates;
g. Decide election and other related cases except those involving the
Election Committee or its members in accordance with the Guidelines
issued by the CDA, Art. 137 of
Republic Act 9520 and its
Implementing Rules and Regulations; Alternative Dispute Resolution
Act of 1994 and its suppletory laws and circulars issued by the
Cooperative Development Authority, and
h. Perform such other functions as may be delegated by the BOD or
authorized by the GA.
Section 5. Education and Training Committee.
An Education and
Training Committee is hereby created and shall be composed of _________ ( )
members to be appointed by the Board of Directors and shall serve for a
term of one (1) year, without prejudice to their reappointment. Within ten
(10) days after their appointment, they shall elect from among themselves a
Vice-Chairperson and a Secretary. The Vice-Chairperson of the Board of
Directors shall act as the Chairperson of the Committee.
The committee shall be responsible for the planning and
implementation of the information, educational and human resource
development programs of the Federation for its members, officers and the
communities within its area of operation.
Section 6. Functions and Responsibilities. The Education and Training
Committee shall:
a. Keep members, officers, staff well-informed regarding cooperative’s
goals/objectives, policies & procedures, services, etc.;

Page 9 of 20

Revised March2012

b. Plan and implement educational program for coop members, officers
and staff;
c. Develop promotional and training materials for the cooperative;
d. Conduct/Coordinate training activities; and
e. Perform such other functions as may be delegated by the BOD or
authorized by the GA.
Section 7. Mediation and Conciliation Committee. A Mediation and
Conciliation Committee is hereby created and shall be composed of
__________( ) members to be appointed by the Board of Directors. Within
ten (10) days after their appointment, they shall elect from among
themselves a Chairperson, Vice-Chairperson and a Secretary who shall serve
for a term of one (1) year or until successors shall have been appointed and
qualified. No member of the Committee shall hold any other position in the
Federation during his term of office.
Section 8. Functions and Responsibilities. The Mediation and Conciliation
Committee:
a. Formulate and develop the Conciliation-Mediation Program and ensure
that it is properly implemented;
b. Monitor Conciliation-Mediation program and processes;
c. Submit semi-annual reports of federation cooperative cases to the
Authority within 15 days after the end of every semester;
d. Accept and file Evaluation Reports;
e. Submit recommendations for improvements to the BOD;
f. Recommend to the BOD any member of the federation cooperative for
Conciliation-Mediation Training as Cooperative Mediator-Conciliator;
g. Settle the disputes lodged in accordance with the Guidelines issued by
the CDA, Art. 137 of Republic Act 9520 and its Implementing Rules
and Regulations; Alternative Dispute Resolution Act of 1994 and its
suppletory laws and circulars issued by the Cooperative Development
Authority;
h. Issue the Certificate of Non-Settlement after exhaustion of reasonable
efforts to settle the disputes lodged in accordance with the Guidelines
issued by the CDA, Art. 137 of
Republic Act 9520 and its
Implementing Rules and Regulations, Alternative Dispute Resolution
Act of 1994 and its suppletory laws and, circulars issued by the
Cooperative Development Authority;
i. Perform such other functions as may be delegated by the BOD or
authorized by the GA.
Section 9. Ethics Committee. An Ethics Committee is hereby created and
shall be composed of ________ ( ) members to be appointed by the Board of
Directors. Within ten (10)days after their appointment, they shall elect from
among themselves a Chairperson, Vice-Chairperson and a Secretary who
shall serve for a term of one (1) year or until successors shall have been
appointed and qualified. No member of the Committee shall hold any other
position in the Federation during his term of office.
Section 10. Functions and Responsibilities. The Ethics Committee shall:
a. Develop Code of Governance and Ethical Standard to be observed by
the affiliates, officers and employees of the Federation subject to the
approval of the BOD and ratification of the GA;
b. Disseminate, promote and implement the approved Code of
Governance and Ethical Standards;

Page 10 of 20

Revised March2012

c. Monitor compliance with the Code of Governance and Ethical
Standards and recommend to the BOD measures to address the gap, if
any;
d. Conduct initial investigation or inquiry upon receipt of a complaint
involving Code of Governance and Ethical Standards and submit
report to the BOD together with the appropriate sanctions in
accordance with the Guidelines issued by the CDA, Art. 137 of
Republic Act 9520 and its Implementing Rules and Regulations;
Alternative Dispute Resolution Act of 1994 and its suppletory laws and
circulars issued by the Cooperative Development Authority;
e. Recommend ethical rules and policy to the BOD;
f. Perform such other functions as may be delegated by the BOD or
authorized by the GA.
Section 11. Other Committees. By a majority vote of all its affiliates, the
Board of Directors may form such other committees as may be deemed
necessary for the operation of the Federation.
ARTICLE VI
Officers and Management Staff
of the Federation
Section 1. Officers and their Duties. The officers of the Federation shall
include the members of the Board of Directors, Members of the different
Committees created by the General Assembly, General Manager or Chief
Executive Officer, Secretary, Treasurer and members holding other positions
as may be provided for in this by-laws, shall serve according to the functions
and responsibilities of their respective offices as follows:
a. Chairperson – The Chairperson shall:
i. Set the agenda for board meetings in coordination with the other
members of the BOD;
ii. Preside over all meetings of the Board of Directors and of the general
assembly;
iii. Sign contracts, agreements, certificates and other documents on
behalf of the cooperative as authorized by the Board of Directors or
by the GA; and
iv. Perform such other functions as may be authorized by the BOD or by
the GA.
b. Vice-Chairperson –the Vice-Chairperson shall:
i. Perform all the duties and responsibilities of the Chairperson in the
absence of the latter;
ii. Act as ex-officio chairperson of the Education and Training
Committee; And
iii. Perform such other duties as may be delegated by the board of
directors.
c. Treasurer – The Treasurer shall:
i. Ensure that all cash collections are deposited in accordance with the
policies set by the BOD;
ii. Have custody of all funds, securities, and documentations
relating to all assets, liabilities, income and expenditures;
iii. Monitor and review the financial management operations of the
federation, subject to such limitations and control as may be
prescribed by BOD;

Page 11 of 20

Revised March2012

iv. Maintain full and complete records of cash transactions;
v. Maintain a Petty Cash Fund and Daily Cash Position Report; and
vi. Perform such other functions as may be delegated by the Board of
Directors and by the General Assembly.
d. Secretary – The Secretary shall:
i. Keep an updated and complete registry of all affiliates
ii. Prepare and maintain records of minutes of all meetings of the BOD
& the GA;
iii. Ensure that necessary BODs’ actions and decisions are transmitted
to the management for compliance and implementation;
iv. Issue and certify the list of affiliates who are in good standing and
entitled to vote as determined by the BOD;
v. Prepare and issue Share Certificates;
vi. Serve notice of all meetings called and certify the presence of quorum
of all meetings of the BOD and GA;
vii. Keep copy of the Treasurer’s report & other reports;
viii. Keep and maintain the Share & Transfer Book;
ix. Serve as custodian of the cooperative seal; and
x. Perform such other functions as may be prescribed be delegated by
the board of directors.and/or by the GA.
e. General Manager. The General Manager shall:
i. Oversee the overall day-to-day business operations of the cooperative
by providing general direction, supervision, management and
administrative control over all the operating departments subject to
such limitations as may be set forth by the BOD or the GA;
ii. Formulate and recommend in coordination with the operating
departments under his/her supervision, the Federation’s Annual and
Medium Term Development Plan, programs and projects, for
approval of the BOD, and ratification of GA;
iii. Implement the duly approved plans and programs of the federation
and any other directive or instruction of the BODs;
iv. Provide and submit to the BODs monthly reports on the status of the
federation’s operation vis-a-vis its target and recommend appropriate
policy or operational changes, if necessary;
v. Represent the federation in any agreement, contract, business
dealings, and in any other official business transaction as may be
authorized by the BODs;
vi. Ensure compliance with all administrative and other requirements
of regulatory bodies;
vii. Maintain records and accounts of the Federation in such manner
that the true condition of its business may be ascertained therefrom
at any time; and
viii. Perform such other functions as may be delegated by the Board of
Directors and by the GA.
Section 2. Liabilities of Directors, Officers and Committee Members.
Directors, officers and committee members, who willfully and knowingly vote
for or assent to patently unlawful acts, or who are guilty of gross negligence
or bad faith in directing the affairs of the federation or acquire any personal
or pecuniary interest in conflict with their duties as Directors, officers or
committee members shall be liable jointly and severally for all damages
resulting therefrom to the federation, members and other persons.

Page 12 of 20

Revised March2012

When a director, officer or committee member attempts to acquire, or
acquires in violation of his duties, any interest or equity adverse to the
Federation in respect to any matter which has been reposed in him in
confidence, he shall, as a trustee for the Federation, be liable for damages or
loss of profits which otherwise would have accrued to the Federation.
Section 3. Management Staff. A core management team composed of
Manager, Cashier, Bookkeeper, Accountant, and other position as may be
necessary or as provided for in their Human Resource Manual shall take
charge of the day-to-day operations of the Federation. The Board of Directors
shall appoint, fix their compensation and prescribe for the functions and
responsibilities.
Section 4. Qualification of the General Manager. No person shall be
appointed to the position of General Manager unless he/she possesses the
following qualifications and none of the disqualifications herein enumerated:
a. Must be familiar with the business operation of the Federation;
b. Must have at least two (2) years experience in the operations of the
federation or related business;
c. Must not be engaged directly or indirectly in any activity similar to the
business of the Federation;
d. Must not have been convicted of any administrative, civil or criminal
cases involving moral turpitude, gross negligence or grave misconduct
in the performance of his duties;
e. Must be of good moral character;
f. Must not have been convicted of any administrative, civil or criminal
case involving financial and/or property accountabilities at the time of
his/her appointment; and
g. Must undergo pre-service and/or in-service trainings.
Section 5. Duties of Cashier. The Cashier of the Federation, who shall be
under supervision and control of the General Manager shall:
a.
b.
c.
d.
e.

Handle monetary transactions;
Receive/collect payments and deposits;
Responsible for money received and expended;
Prepare reports on money matters; and
Perform such other duties as the Board of Directors may require.

Section 6. Duties of the Accountant. The Accountant of the Federation,
who shall be under supervision and control of the General Manager shall:
a. Install an adequate and effective accounting system within the
Cooperative;
b. Render reports on the financial condition and operations of the
Federation monthly, annually or as may be required by the Board of
Directors and/or the general assembly;
c. Provide assistance to the Board of Directors in the preparation of
annual budget;
d. Keep, maintain and preserve all books of accounts, documents,
vouchers, contracts and other records concerning the business of the
Cooperative and make them available for auditing purposes to the
Chairperson of the Audit Committee; and
e. Perform such other duties as the Board of Directors may require.
Section 7. Duties of the Bookkeeper. The bookkeeper of the Federation
who is under supervision and control of the Accountant shall:

Page 13 of 20

Revised March2012

a. Records and update books of accounts;
b. Provide assistance in the preparation of reports on the financial
condition and operations of the Cooperative monthly, annually or as
may be required by the Board of Directors and/or the general
assembly;
c. Keep, maintain and preserve all books of accounts, documents,
vouchers, contracts and other records concerning the business of the
Cooperative and make them available for auditing purposes to the
Chairperson of the Audit Committee; and
d. Perform such other duties as the Board of Directors may require.
Section 8. Qualifications of Accountant, Cashier, and Bookkeeper. No
person shall be appointed to the position of accountant and bookkeeper
unless they possess the following qualifications and none of the
disqualifications herein enumerated:
a. Bachelors degree in accountancy must be required for Accountant
however Cashier and Bookkeeper must be knowledgeable in handling
monetary transactions, accounting and bookkeeping;
b. Must have at least two (2) years experience in Cooperative operation or
related business;
c. Must not be engaged directly or indirectly in any activity similar to the
business of the Cooperative;
d. Must not be convicted of any administrative, civil or criminal case
involving moral turpitude, gross negligence or grave misconduct in the
performance of his/her duties;
e. Must be of good moral character;
f. Must be willing to undergo pre-service and/or in-service trainings in
accounting; and
g. Must not have been convicted of any administrative, civil or criminal
case involving financial and/or property accountabilities at the time of
his/her appointment.
Section 9. Compensation. Subject to the approval of the general assembly,
the members of the Board of Directors 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 Federation, 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 Federation reported a net loss or had a
dividend rate less than the official inflation rate for the same year.
ARTICLE VII
Capital Structure
Section 1. Source of Funds. The Federation may derive its funds from any
or all of the following sources:
a. Affiliates’ share capital contribution;
b. Loans and borrowings including deposits;
c. Revolving capital build-up which consist of the deferred payment of
patronage refund or interest on share capital;
d. Subsidies, grants, legacies, aids, donation and such other assistance
from any local or foreign institution, public or private;
e. Retentions from the proceeds of services acquired /goods procured by
members; and

Page 14 of 20

Revised March2012

f. Other sources of funds as may be authorized by law.
Section 2. Continuous Capital Build-Up. Every member shall have invested
in any or all of the following:
a. At least _____________Pesos (P_________)per annum;
b. At least _____ percent (__%) of affiliate’s annual interest on capital and
patronage refund; and
c. At least _________ percent (__%) of each good procured /service
acquired from the Federation.
Section 3. Borrowing. The Board of Directors, upon approval of the General
Assembly, may borrow funds from any source, local or foreign, under such
terms and conditions that best serve the interest of the Federation.
Section 4. Revolving Capital. To strengthen the capital structure of the
Federation, the general assembly may authorize the Board of Directors to
raise a revolving capital by deferring the payment of patronage refunds and
interest on share capital, or such other schemes as may be legally adopted.
To implement this provision, the Board of Directors shall issue a Revolving
Capital Certificate with serial number, name, rate of interest, date of
retirement and such other privileges or restrictions as may be deemed just
and equitable.
Section 5. Retentions. The general assembly may authorize the Board of
Directors to raise additional capital by deducting a certain percent on a per
unit basis from the proceeds of services acquired and/or goods procured by
members.
Section 6. Share Capital Contribution. Share Capital Contribution refers
to the value of capital subscribed and paid for by an affiliate in accordance
with its Articles of Cooperation.
Section 7. Fines on Unpaid Subscribed Share Capital. The Board of
Directors shall prescribe a reasonable fine for unpaid subscription of share
capital.
Section 7. Share Capital Certificate. The Board of directors shall issue a
Share Capital Certificate only to an affiliate who has fully paid his
subscription. The Certificate shall be serially numbered and contain the
share holder’s name, the number of shares owned, the par value, and duly
signed by the Chairperson and the Secretary, and bearing the official seal of
the Federation. All certificates issued and/or transferred shall be registered
in the Federation’s Share and Transfer Book.
The number of paid share required for the issuance of Share Capital
Certificate shall be determined by the Board of Directors.
The shares may be purchased, owned or held only by the primary
cooperative who are eligible for membership. Subject to existing government
rules or laws, interests shall be paid only to paid-up shares which may be in
cash; or credited as payment of unpaid subscriptions, outstanding accounts,
or additional shares or to the revolving fund of the Federation.
Section 8. Transfer of Shares. The Federation shall have the first option to
buy any share offered for sale. The amount to be paid for such shares shall
be the par value provided that:
a. The Affiliate has held such shares or interests for not less than one (1)
year;
b. The transfer is made to an affiliate of the Federation or eligible
cooperative that falls within the field of membership of the Federation;
and
Page 15 of 20

Revised March2012

c. The Board has approved such transfer.
The transfer of shares shall not be binding to the Federation until such
transfer has been registered in the share and transfer book. No transfer
shall be completed until the old certificate have been endorsed and
surrendered to the Federation and a new certificate is issued in the name of
the affiliate. The corresponding transfer fee shall be collected from the
transferee as prescribed in the federation policy.
In case of lost or destroyed share certificate, the Board of Directors may
issue a replacement after the affiliate-owner thereof executes a sworn
affidavit, setting forth the following:
a. Circumstances as to how, when and where said certificate was lost or
destroyed;
b. The serial number of the certificate; and the number of shares it
represents;
c. The lost or destroyed certificate has never been transferred, sold or
endorsed to any third party, that should the same be found, the owner
shall surrender it to the Federation; and
d. That any false representation or statement made in the aforesaid
affidavit shall be a ground for expulsion from the Federation.
ARTICLE VIII
Operations
Section 1. Primary Consideration. Adhering to the principle of service
over and above profit, the Federation shall endeavor to:
a. Engage in:
a.1 ___________________________________________________
a.2 ___________________________________________________
a.3 ___________________________________________________
b. Formulate and implement program strategies that will provide its
affiliates and the communities within its area of operation needed
goods/services;
c.
Adopt and implement plans and programs which insures the
continued build-up of the Federations’ capital structure with the end
view of establishing other needed services for the members and the
public;
d. Formulate and implement studies and/or programs that will address
the needs of affiliate; and
e. Collect CETF and other dues from its affiliates.
ARTICLE IX
Allocation and Distribution of Net Surplus
Section 1. Allocation - At the end of its fiscal year, the Federation shall
allocate and distribute its net surplus as follows:
a. Reserve Fund. ________ percent (____%)shall be set aside for
Reserve Fund subject to the following rules, provided, that in the first five (5)
years of operation after registration, this amount shall not be less than fifty
per centum (50%) of the net surplus:
i. The reserve fund shall be used for the stability of the Federation and
to meet net losses in its operations. The general assembly may
decrease the amount allocated to the reserve fund when it has
already exceeded the authorized share capital. Any sum recovered on

Page 16 of 20

Revised March2012

items previously charged to the reserve fund shall be credited to
such fund.
ii. The reserve fund shall not be utilized for investment, other than
those allowed in the Republic Act No. 9520. Such sum of the reserve
fund in excess of the authorized share capital may be used at any
time for any project that would expand the operations of the
Federation upon the resolution of the general assembly.
iii. Upon the dissolution of the Federation, the reserve fund shall not be
distributed among the affiliates. However, the general assembly may
resolve:
a. To establish usufructuary fund for the benefit of any federation
or union to which the Federation is affiliated; or
b. To donate, contribute or otherwise dispose of the amount for the
benefit of the community where the Federation operates. If the
affiliate could not decide on the disposition of the reserve fund,
the same shall be given to the federation or union to which the
cooperative is affiliated.
b. Education and Training Fund. ________ percent (____%)shall be
set aside for Education and Training Fund.
i.

Half of the amount allocated to the education and training fund
annually under this subsection may be spent by the Federation for
education and training purposes; while the other half may be
remitted to a union or federation chosen by the Federation or of
which it is a affiliated with.

ii.

Upon the dissolution of the Federation, the unexpended balance of
the education and training fund pertaining to the Federation shall
be credited to the Federations’ education and training fund of the
chosen union or federation.

c. Community Development Fund. ________ percent (____%)shall be
used for projects and activities that will benefit the community where the
Federation operates.
d. Optional Fund. ________ percent (____%)shall be set aside for
Optional Fund for land and building, and any other necessary fund.
Section 2. Interest on Share Capital and Patronage Refund. The
remaining net surplus shall be made available to the affiliates in the form of
interest on share capital not to exceed the normal rate of return on
investment and patronage refunds. Provided, that any amount remaining
after the allowable interest and the patronage refund have been deducted
shall be credited to the reserved to the reserve fund. The sum allocated for
patronage refund shall be made available at the same rate to all patrons of
the Federation in proportion to their individual patronage, provided that:
a. In the case of a affiliate/member patron with paid-up share capital
contribution, his/her proportionate amount of patronage refund shall
be paid to him unless he/she agrees to credit the amount to his/her
account as additional share capital contribution;
b. In the case of affiliate/member patron with unpaid share capital
contribution, its/his/her proportionate amount of patronage refund
shall be credited to its/his/her account until the share capital has
been fully paid;

Page 17 of 20

Revised March2012

c. In the case of non-affiliate/member patron, its/his/her proportionate
amount of patronage refunds shall be set aside in a general fund for
such patron and shall be allocated to individual non-member patron
and only upon request and presentation of evidence of the amount of
his/her patronage. The amount so allocated shall be credited to such
patron toward payment of the minimum capital contribution for
membership. When a sum equal to this amount has accumulated at
any time within two (2 ) years, such patron shall be deemed and
become an affiliate of the Federation if he so agrees or requests and
complies with the provisions of the bylaws for admission to
membership; and
d. If within the period specified hereof, any subscriber who has not fully
paid his subscribed share capital or any non-affiliate patron who has
accumulated, the sum necessary for membership, but who does not
request nor agree to become an affiliate or fails to comply with the
provisions of this bylaws for admission to membership, the amount so
accumulated or credited to their account together with any part of the
general fund for non-member patron shall be credited to the reserve
fund or to the education and training fund, at the option of the
Federation.
ARTICLE X
Settlement of Disputes
Section 1. Mediation and Conciliation. All inter and intra-federation
disputes shall be settled within the Federation in accordance with the
Guidelines issued by the Cooperative Development Authority, Art. 137 0f
Republic Act No. 9520 and its Implementing Rules and Regulations,
Alternative Dispute Resolution Act of 2004 and its suppletory laws.
Section 2. Voluntary Arbitration. Any dispute, controversy or claim
arising out of or relating to this By-laws, the cooperative law and related
rules, administrative guidelines of the Cooperative Development Authority,
including disputes involving members, officers, directors, and committee
members, intra-federation disputes and related issues, and any question
regarding the existence, interpretation, validity, breach or termination of
agreements, or the membership/general assembly concerns shall be
exclusively referred to and finally resolved by voluntary arbitration under the
institutional rules promulgated by the Cooperative Development Authority,
after compliance with the conciliation or mediation mechanisms embodied in
this By-laws, and in such other applicable laws.
Article XI
Miscellaneous
Section 1. Investment of Capital.
any or all of the following:

The Federation may invest its capital in

a. Shares or debentures or securities;
b. Any reputable bank in the locality or any tertiary federation of which it
is a member and cooperative banks;
c. Securities issued or guaranteed by Government;
d. Real Estate primarily for the use of the Federation or its affiliates; or
e. In any other manner approved by the general assembly.

Page 18 of 20

Revised March2012

Section 2. Accounting System. The Federation shall keep, maintain and
preserve all its books of accounts and other financial records in accordance
with generally accepted accounting principles and practices, applied
consistently from year to year, and subject to existing laws, rules and
regulations.
Section 3. Financial Audit, Performance Audit, and Social Audit. At
least once a year, the Board of Directors shall cause, in consultation with the
Audit Committee, the audit of the books of accounts of the Federation,
performance audit and social audit by CDA Accredited Independent Certified
Public Accountant, Accredited Social Auditor, and Federation Compliance
Officer/Audit Committee.
Section 4. Annual Report. During the annual regular assembly meeting, the
Federation shall submit a report of its operation to the General Assembly
together with the Audited Financial Statements, Performance Audit and
Social Audit reports. The Cooperative Annual Performance Report shall be
certified by the Chairperson and Manager of the Federation as true and
correct in all aspects to the best of their knowledge. The Audited Financial
Statements and Social Audit Reports shall be certified by CDA Accredited
Independent Auditors.
The Federation shall submit the following reports to the Authority
within (120) days from the end of every calendar year:
a.
b.
c.
d.
e.
f.

Cooperative Annual Performance Report (CAPR);
Social Audit Report;
Performance Report;
Audited Financial Statement duly stamped “Received” by BIR;
List of officers and trainings undertaken/completed;
List of cooperatives which have remitted their respective Cooperative
Education and Training Funds (CETF);
g. Business consultancy assistance to include the nature and cost and
h. Other training activities undertaken specifying therein the nature,
participants, and cost of the activity.
ARTICLE XII
Amendments
Section 1. Amendment of Articles of Cooperation and By-laws.
Amendments to the Articles of Cooperation and this By-Laws may be
adopted by at least two-thirds (2/3) votes of all members with voting rights
without prejudice to the rights of dissenting members to withdraw their
membership under the provisions of the Philippine Cooperative Code of
2008.
The amendment/s shall take effect upon approval by the Cooperative
Development Authority.
Voted and adopted this _____ day of _______, 20___ in ____________,
Philippines.

Name of Affiliate

Name of
Representative

Page 19 of 20

Signature

Revised March2012

Name of Affiliate

Name of
Representative

Signature

We, constituting the majority of the Board of Directors of the
______________________________________________________ do hereby certify that
the foregoing instrument is the Code of By-laws of this Federation.
Signed this _____ of ___________, ________, in ____________.

____________________
Chairperson

_____________________
Vice Chairperson

____________________
Director

_____________________
Director

___________________
Director

_____________________
Director

Page 20 of 20
 
Page of
Share