CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES Documentary Requirements : ‘Aleter request for authority to establish a cooperative branch shay be signed by the Chairman of the cooperative or General Manager a1 authorized by the Board and shall be accompanied by the following information/documents: 1. Business plan; Business Plan : It refers to a business study showing the marketability of roducts/services, and also the financial, technical, legal and organizationa| aspects of the proposed business establishment. It shall also include financia) projections for the first three years of operations showing sustained viabiliy, In the preparation of the business plan, due consideration shall be given to allocation of resources to the proposed branch. 2. General assembly resolution authorizing the establishment of the branch and commitment of investment or allocation of resources in its operation, 3. Certification signed by the Chairman/General Manager of the following a. Presence of Manual of Operations for Branch; Manual of Operation It refers to a document showing the compilation of detailed policies and procedures in the operation of the cooperative, b. Address of the proposed branch; and ¢. Audited Financial Statement for the last 3 years, Processing fee The processing fee for the issuance of Certificate of Authority for each branch shall be as follows: [Php 2,000.00. Php 3,000.00. Certificate of Authority The official document issued by the Authority authorizing the ¢stablishment and operation of a cooperative branch, 518CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES Note: A Certificate of Authorit is i sordivanch heh nates ity shall be issued by CDA to cooperatives applying fe with the documentary requirements and processing Relocation/Transfer of Branch of Cooperatives Cooperatives may be allowed by the CD, subject tothe following cota atowed by the CDA to relocate /transter branch 1, Notice to CDA of relocation/transfer of Se betel ean of branch at least three (3) months 2. Posting of notice of relocation /transfer in conspi ic picuous place where the branch office is located at least three (3) months prior to scheduled relocation/transfer; Compliance to pre-qualification number 1; and 4. Payment of processing fee amounting to Php 500.00 for the issuance of new Certificate of Authority upon surrender and cancellation of the old certificate. Transfer of Office I refers to the relocation of the office address of cooperative branch within the same municipality/city. Note: The Extension Office (EO) of the CDA where the branch office is located is authorized to conduct annual inspection (Branch Office Inspection) to validate the conditions of branch office operations. Inspection Report Itrefers to the documents where the findings/observations, actions and recommendations of the CDA authorized person who conducted the inspection are summarized and presented. Administrative Regulations 1. All cooperatives intending to put up a branch and cooperatives with existing branch office should be established within the area of operation ofthe cooperative. For cooperatives intending to branch outside the area of operation, approval of the articles of cooperation expanding the area of operation shall be secured; 2. Nobranch should be established within a 500-meter radius of the nearest cooperative engaged in the same line of business as the proposed branch; ‘The branch office shall have a separate Book of Accounts; 4. Minimum of three (3) personnel to man the office such as but not limited to manager, bookkeeper, and cashier; Adherence to the manual of operation at all times; Issuance of official receipt in the financial transactions of the branch; 519 anCHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES 7. Imprest system of handling cash shall be complied with at all times; 8 Allbranch offices should secure a Barangay and Mayor's Permit; 9. Compliance to other regulations as may be determined by othe; government agencies including the Authority; — 10, Submission of operational reports to the principal/head office such ag financial statements, cash flows, and other relevant reports required by the main office and the Authority; and 11. Same report as mentioned in number 10 be submitted to the cpa Extension Office where the branch is located. Voluntary Closure of Cooperative Branch Voluntary closure of cooperative branch shall be allowed, provided, that the following procedures are complied with: 1. Adocument, duly signed by a Branch Manager noted by the Chairman of the Cooperative, ofits intention to close a branch office shall be submitted to the Authority atleast three (3) months prior to the closure; 2. Sending of Notice/Posting of Notice of Closure in conspicuous place of the branch office shall be made in order to inform members and creditors of the branch office to be closed at least three (3) months prior to the closure; 3. Upon submission of the report on the completion of Par. 1 and 2, the Authority shall automatically issue an Order of Closure to the concerned cooperative branch office. This also cancels the Certificate of Authority issued. SATELLITE OFFICE It refers to an office established by a cooperative outside of its principal/main office but within its area of operation to provide limited services to its members but which does not however maintain books of accounts as itis done only by the principal/main office. The term satellite office shall include an extension office, a sub- office or other terms of similar import. Documentary Requirements The application for a Letter of Authority to establish a cooperative satellite office shall be accompanied by the following documents: a. Certificate of Compliance for the preceding year; b. Oath of Undertaking signed by the Chairperson of the cooperative for the specific services/activities to be undertaken by the Proposed satellite office: ¢. Certification as to available space and manpower to. manage the office; and 4. Official Receipt showing payment of the processing fee «Mc 2016-05 520CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES Letter of Authority It refers to the official document issu led by the Authorit izi the establishment and operation of a cooperative 0 t ince authorizing processing Fee The processing fee for the issuance of cooperative saallta fice shall best rane ea Aetna for each Fee [Category [Php 500.00 [Primary lPhp 1,000.00 econdai Php 2000.00 ——festass- Services /Activities Allowed in a Cooperative Satellite Office The cooperative satellite office shall render services and conduct business activities, which shall not be limited to the following 1, Recruitment of members; 2. Acceptance of applications for membership; 3. Acceptance of loan applications; 4 Collection and acceptance of payments for share capital contributions, loans, and/or utility bills in the case of electric and water service cooperatives; 5. Release of loans, patronage refund, and interest on capital. ‘All applications for membership, loans and other business transactions accepted in the satellite office shall be endorsed to the principal/main office for appropriate action. In no case shall the satellite office exercise discretion on such matters. Conditions for Cooperative Satellite Office Operations The following shall be the conditions that must be observed in operating a cooperative satellite office: 1. Presence of a signage as a cooperative satellite office; 2. List of specific transactions that may only’ be undertaken as approved by the cooperative’s Board of Directors; . Presence of Operational Structure; . Submission of summary reports to the head office; 5. Presence of a Barangay Permit and a Mayor's Permit that should be posted in the office at all times; 6. Maintenance of Accountable Forms ; (eg, Cash Acknowledgement/Provisional/ Official Receipt, vouchers, etc): 7. Maintenance of record of daily transactions to be submitted to the principal/main office; 8. Official Receipts showing re payments of processing fees; 521CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES 9, Availabilty of appropriate logistics (eg. personnel complete compute, "tables, chairs, cash register, cash vault an box, irene nade ban oe oat imum number of personnel as determined by hq * erieipal ain ofe toffectively discharge the functions of the satel, ffice; cus 11, Turnover or deposit ofall collections within the day to the account ofthe principal/main office or imprest system of handling cash; and 12. Other conditions as may be determined by the Authority. Relocation/Transfer of Cooperative Satellite Office Cooperatives may be allowed to relocate/transfer their satellite offices subject to the following conditions: 1. Notice to the Authority of such relocation/transfer of satellite office at least three (3) months before the actual transfer; 2. Posting of notice of relocation /transfer in a conspicuous place where the satellite office is located at least three (3) months prior to the scheduled date of relocation /transfer; and 3. Payment of processing fee amounting to Php 500.00 for the issuance of new Letter of Authority upon surrender and cancellation of the old Letter of Authority. Voluntary Closure of a Cooperative Satellite Office Voluntary closure of cooperative satellite office shall be allowed, provided, that the following procedures are complied with: 1, Submission of a Letter of Intention to close a satellite office at least three (3) months prior to the closure; 2. Sending of Notice/Posting of Notice of Closure in a conspicuous place of the satellite office in order to inform members and/or creditors of the satellite office of such closure at least three (3) months prior to the closure; and 3. After compliance with the first two (2) procedures, the Authority shal issue an Order of Closure of the cooperative satellite office to the concerned cooperative. i i eter ope atv Cancelaton of the Letter of Authority shall failure to comply with the above procedures shall bar th cooperative from establishing anoth, i : be its pi pila ig T satellite office anywhere within What is a Cooperative? isan autonomous and duly regi ciation ly registered asso together to achig oman bond of interest, who have voluntarily jolt! aspirations by malon en ooh economic, and cultural needs a 'Y making equitable contributions to the capital required: 522CHAPTER 1 - GENERAL CONCEPTs AND PRINCIPLES atronizing their products and services ai ind accept i risks and benefits of the undertaking in ante aneea accepted cooperative principles, e universally Cooperative Principles v Brery conperatiye shall conduct its affairs in accordance with Filipino » Good values and experience and the universally ted principles of i ich it a etig: ples of cooperation which include, but are not limited to, 1, Voluntary and Open Membership Cooperatives are volunta zat ry organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination. 2. Democratic Member Control Cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions, Men and women serving as elected representatives, directors or officers are accountable to the membership. In primary cooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels are organized in the same democratic manner. 3. Member Economic Participation Members contribute equitably to, and democratically control, the capital of their cooperatives. At least part of that capital is the common property of the cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed and paid as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative by setting up reserves, part of which should at least be indivisible; benefitting members in proportion to their patronage of the cooperative's business; and, supporting other activities approved by the membership. 4. Autonomy and Independence Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including government, or raise capital from external sources, they shall do so on terms that ensure 5am 3, Roc 523CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES democratic control of their members and maintain their cooperative autonomy. 5S. Education, Trainingand Information - ‘Cooperatives shall provide education and training for their members, elected and appointed representatives, managers, and employees, so that they can contribute effectively and efficiently to the development of their cooperatives. 6. Cooperation Among Cooperatives Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. 7. Concern for Community Cooperatives work for the sustainable development of their communities through policies approved by their members. Definition of Terms 1. N Member It includes a person either natural or juridical who adhering to the principles set forth in the Philippine Cooperative Code and in the Articles of Cooperative, has been admitted by the cooperative as member. General Assembly It means the full membership of the cooperative duly assembled for the purpose of exercising all the rights and performing all the obligations pertaining to cooperatives, as provided by the Philippine Cooperative Code, its articles of cooperation and bylaws: Provided, That for cooperatives with numerous and dispersed membership, the general assembly may be composed of delegates sleciee by ee or district of the cooperative in accordance e rules and Development Authority. Fepulaitonsxot; the) Cooperative . Board of Directors It means the body entrusted with the ma i rn jem of the cooperative under its articles of, eoiperaiicandustawss Art 4, PCC 524CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES 4, Committee It refers to anybody entrusted with speci efers specific functions and responsibilities under the bylaws or resolution of the general assembly or the board of directors, f ;._ Articles of Cooperation _It means the articles of cooperation registered under the Philippine Cooperative Code and includes a registered amendment ereof. 6. Bylaws It means the bylaws registered under the Philippine Cooperative Code and includes any registered amendment thereof. 7. Registration It means the operative act granting juridical personality to a proposed cooperative and is evidenced by a certificate of registration. 8. Cooperative Development Authority (CDA) It refers to the government agency in charge of the registration and regulation of cooperatives. 9. Universally Accepted Principles It means that body of cooperative principles adhered to worldwide by cooperatives. 10. Representative Assembly It means the full membership of a body of representatives elected by each of the sectors, chapter or district of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its bylaws. 11, Officers of the Cooperative It includes the members of the board of directors, members of the different committee created by the general assembly, general manager or chief executive officer, secretary, treasurer and members holding other positions as may be provided for in their bylaws. 525CIPLES CHAPTER 1 - GENERAL CONCEPTS ‘AND PRIN note Section 10 of Rule !- Representative Assembly of he Fs re pegulations Implementing Certain Provisions aia ac daring the Genera fe a 9520) provides that “each sector, char 5 ineediganrertay the adoption fh a teh its Loca Election Conimittee that will conduct the efecton 0! $500" 1 OF distri Representative Delegate xxx.” Inrelation tothe above, the members ofthe Local Election Committee shay be termed as “Election Deputies’. Being such, they shall not be considered as Officers of the Cooperative within the meaning of Art. 5 (11) of RA. 9520.7 12. Social Audit It is a procedure wherein the cooperative ei its social i veal performance vis-i-vis its stated mission, vision, eric ibility for cooperatives to be goals and code of social responsibility for © a tablished by the Authority in consultation with the cooperative sector. It enables the cooperative 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 its regular members. 13. Performance Audit It refers to an audit on the efficiency and effectiveness of the cooperative as a whole; ts 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. 14. A Single-Line or Single-Purpose Cooperative It includes cooperative undertaking activities which are related to its main line of business or purpose. 15. Service Cooperatives These are those which provide any h y type of service to its members, including but not limited to, aes information and communication, insurance, housing, electric, health services, education, banking, and savings and credit, PMc 2011-12 526CHAPTER 1 - GENERAL CONCEPTS AND PRINCIPLES 16. Subsidiary Cooperative It 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. 17. Federation of Cooperatives Itrefers to three or more primary cooperatives, doing the same line of business, organized at the municipal, provincial, city, special metropolitan subdivision, or economic zones created by law, registered with the Authority to undertake business activities in support of its member-cooperatives.® tans, mea ren 527[PLES CHAPTER I - GENERAL CONCEPTS AND PRINCI RT 1 ‘ ire eee cooperates can set-up cooperative branch office and a i ite office. cooperative satellite of sccettattinto yudesTe ie e the prival rata I, The State shall encourage te PT tives and shall create ition and organizati cooperatives. a. Onlylis true b. Only lis true c. Bothare true d. Bothare false 2. It refers to a business office outside the principal office where cooperative activities and business operation are undertaken as per approved cooperative development plan. a. Branch office b. Head office Franchise office d. cooperative store 3. It refers to the registered head office as indicated in the articles of cooperation and bylaws of the cooperative where the business and cooperative activities are conducted and central records and main books of accounts are kept. a. Main office b. Sub office ©. Franchise office d. cooperative store 4. Itrefers to equity inclusive of member's equity, donations, grants and reserve funds less unbooked allowance for probable losses on loans, accounts receivable, investment and non-performing assets, and other capital adjustments as may be required by CDA. a. Capital b. Liabilities c. Net Worth 4. Stockholders’ Equity 5. It refers to a business stud ily | ly showing the marketability © products/servies) and also the financial, technical, legal and rganizational aspects of the proposed business establishment. a. Feasibility Study b. Business Plan © Marketing strategy 4. Financial Plan 528CHAPTER I - GENERAL CONCEPTS AND PRINCIPLES 10. Itrefers to a document sh procedures in the operati ‘owing the compilation of detailed policies and erin in ion of the cooperative. b. Handbook Bylaws d. Manual of operation The official document issued by be y the Authority authorizing the establishment and operation ofa cooperative bran, ° a. Articles of cooperation : b. Bylaws © Rules, regulation and discipline 4. Certificate of Authority It refers to an office established by a cooperative outside of its principal/main office but within its area of operation to provide limited services to its members but which does not however maintain books of accounts as it is done only by the principal/main office. a. Satellite office b. Main Office c. Principal office d. Head office Itis 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. a. Partnership b. Corporation . Cooperative d. Sole Proprietorship 1. Every cooperative shall conduct its affairs in accordance with Filipino culture, good values and experience and the universally accepted principles of cooperation. : ; Il. The Government and all its branches, subdivisions, instrumentalities and agencies shall ensure the provision of technical guidance, financial assistance and other services to enable said cooperatives to develop into viable and responsive economic enterprises and thereby bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives. a. Only[istrue b. Only Ilis true ¢. Bothare true 529CHAPTER I - GENERAL CONCEPTS 11. 2s 13. 14, 15. 16. AND PRINCIPLES d. Both are false hhich enunciates that members contribute Itis a cooperative principle w! trol, the capital of their equitably to, and democratically co cooperatives. a, Voluntary and open membership b, Member economic participation c. Democratic member control 4. Autonomy and independence which enunciates that cooperatives serve strengthen the cooperative h local, national, regional and It is a cooperative principle their members most effectively and movement by working together throug! international structures. a. Cooperation among cooperatives b. Concern for community ¢. Education, training and information . Autonomy and independence It is a cooperative principle which enunciates that cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, cultural, political or religious discrimination. a. Voluntary and open membership b. Member economic participation c. Democratic member control d. Concern for Community It is a cooperative principle which enunciates that cooperatives are democratic organizations that are controlled by their members who actively participate in setting their policies and making decisions. a. Concern for the community b. Democratic member control ¢. Education, training and information d. Autonomy and independence It is a cooperative principle which enunciates that cooperatives are autonomous, self-help organizations contre i a. Concern for the community ar mad b. Cooperation among cooperatives ©. Voluntary and open membership 4d. Autonomy and independence Iti fee penal . poodle hens Principle which enunciates that cooperatives shall appointed representatives, poeago,helt_ members, elected and ves, managers, and employees, so that they ca” 530CHAPTER I - GENERAL CONCEPTS AND PRINCIPLES 17. 18. 19. 20. 21. contribute effectively and efficie cooperatives. a. Cooperation among cooperatives b, Democratic member control ¢. Education, training and information 4. Voluntary and open membership ntly to the development of their Itisa cooperative principle which enunciates that cooperatives work for the sustainable development of their communities through policies approved by their members, a. Concern for the community b. Cooperation among cooperatives Voluntary and open membership d. Member economic participation Itmeans the full membership of the cooperative duly assembled for the purpose of exercising all the rights and performing all the obligations pertaining to cooperatives. a. Stockholders b. Members ¢. General assembly d. Shareholders It refers to anybody entrusted with specific functions and responsibilities under the bylaws or resolution of the general assembly or the board of directors. a. Board of Directors b. Committee Board of Trustees d. Stockholders It means the operative act granting juridical personality to a proposed cooperative and is evidenced by a certificate of registration, a. Authority b. Incorporation License d. Registration It includes a person either natural or juridical who adhering to the principles set forth in the Philippine Cooperative Code and in the Articles of Cooperative, has been admitted by the cooperative as member. a. Trustee b. Member . Director d. Officer 531CHAPTER I~ GENERAL CONCEPTS AND PRINCIPLES 22. 23. 24, 25. 26. 27. with the management of the affairs of the itrusted a dei f cooperation and bylaws. cooperative under its articles of a. Board of Trustees b. Committee Officers 4. Board of Directors It refers to the government agency in charge of the registration and regulation of cooperatives. a. Cooperative Development Authority b. Securities and Exchange Commission c. Department of Trade and Industry 4. Intellectual Property Office It means the full membership of a body of representatives elected by each of the sectors, chapter or district of the cooperative duly assembled for the purpose of exercising such powers lawfully delegated unto them by the general assembly in accordance with its bylaws. a. Committee b. General assembly c._ Representative assembly d. Satellite It includes the members of the board of directors, members of the different committee created by the general assembly, general manager or chief executive officer, secretary, treasurer and members holding other positions as may be provided for in their bylaws. a. Officers of the cooperative b. stockholders of the cooperative c._ members of the cooperative 4. consultants of the cooperative It refers to three or more primary cooperatives, doing the same line of business, organized at the municipal, provincial, city, special metropolitan subdivision, or economic zones created by law, registered with the CDA to undertake business activities in support of its member cooperatives. a. Representative assembly b. Federation of cooperatives Subsidiary cooperative d. Multi-purpose cooperative It refers to any organization all or majority of whose membership oF shareholders come from a cooperative, organized for any other purpose different from that of, and receives technical, managerial and financial assistance from, a cooperative, a. Principal cooperative 532CHAPTER I - GENERAL CONCEPTS AND PRINCIPLES 28. 29. 30, 31. b. Branch cooperative c. Satellite cooperative d. Subsidiary cooperative ‘These are those which provide any type of service to its members, including but not limited to, transport, information and communication, insurance, housing, electric, health services, education, banking, and savings and credit. 7 a. Credit cooperative b. Transport cooperative «. Electric cooperative d. Service cooperative It includes cooperative undertaking activities which are related to its main line of business or purpose. Multi-purpose cooperative b. Single-Line or Single-Purpose cooperative c. Subsidiary cooperative d._ Principal cooperative Itrefers to an audit on the efficiency and effectiveness of the cooperative as a whole; its management and officers; and its various responsibility centers a. Financial audit b. Social audit c. Performance audit d. Quality Management audit Itis a procedure wherein the cooperative assesses its social impact and ethical performance vis-a-vis its stated mission, vision, goals and code of social responsibility for cooperatives to be established by the CDA in consultation with the cooperative sector. a. Financial audit b. Social audit . Performance audit d. Quality Management audit 533