Cooperatives

• A cooperative may be formed by at least 15 natural persons.
• No foreigner can form a cooperative. Only Filipinos can.
• A cooperative, similar to a corporation, has limited liability and a separate personality other than the persons composing it.
• The minimum paid up capital for single purpose cooperatives is P15,000. For multipurpose cooperatives, it is P100,000.
• The par value of shares in a cooperative cannot be less than P100, but not more than P1,000
• A cooperative may issue preferred shares if provided in the bylaws and it cannot exceed 25% of its total authorized capital stock
• A member cannot own more than 10% of the capital stock in a cooperative.
• If a member inherits capital stock from a co-member, he can only receive the portion that will not make him exceed 10% of the capital stock. The excess has to be acquired by the cooperative by paying the fair value of the excess shares.
• The quorum required for the general assembly meeting of cooperatives is generally at least 25%.
• The quorum required for the general assembly meeting of electric cooperatives is at least 5%.
• The quorum required for the general assembly meeting of cooperative banks is at least majority
• A laboratory cooperative does not have juridical personality.
• When a director is removed, he or she may be replaced by the remaining directors still constituting majority.
• The term of directors in a cooperative is 2 years
• If there is no fixed date of the cooperative’s general assembly regular meeting, it shall be held within 90 days from the close of its fiscal year.
• Proxy voting by members of a cooperative is only prohibited in primary cooperatives.
• In a cooperative with 200 members, the presence of 50 (25%) constitutes a quorum, and 38 (75%) members of those present may remove a director after observance of due process. The same goes for ratification of contracts with self-dealing and interlocking directors, and mergers.
• A cooperative’s articles of cooperation or bylaws may only be amended by 2/3 vote of ALL its voting members. The vote of the board of directors is NOT necessary.
• The prior written notice of special board meetings in cooperatives is at least ONE WEEK
• When a cooperative is dissolved and liquidated, the assets distributable to an unknown member shall be given to the federation or union to which the cooperative is affiliated with.