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(NAR) VOL. 7 NO. 3 / JULY-SEPTEMBER 1996
[ CDA MEMORANDUM CIRCULAR NO. 01, S. 1996, January 10, 1996 ]
GUIDELINES ON THE FORMULATION OF ARTICLES OF COOPERATION AND BY-LAWS FOR INDIGENOUS PEOPLE’S COOPERATIVES (IPCS)
Pursuant to CDA Board Resolution No. 372, s. 1995 dated October 5, 1995, as amended by Resolution No. 469, s. 1995 dated December 11, 1995, the Authority adopted the Guidelines on the formulation of Articles of Cooperation and By-Laws for Indigenous People’s Cooperatives (IPCs), copy of which is hereto being attached as Annex “A”.
The guidelines shall govern the procedures required to be undertaken in the area of the registration of IPCs with the CDA.
For information and guidance.
Adopted: 10 Jan. 1996
(SGD.) EDNA E. ABERILLA
Chairman
ANNEX “A”
GUIDELINES ON THE FORMULATION OF ARTICLES OF COOPERATION AND BY-LAWS FOR INDIGENOUS PEOPLE’S COOPERATIVES
1
Legal Basis
1.1 Provisions of R.A. No. 6938
1.1.1 Article 2. Declaration of Policy — It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives.
Towards this end, the government.....shall ensure the provision of technical guidance, financial assistance and their services to..... bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives.
1.1.2 Article 4. Cooperative Principles — Every cooperative shall conduct its affairs in accordance with Filipino culture and experience and the universally accepted principles of cooperation........
2
Definition of Terms
(Yet to be defined)
3
Formulation of Articles of Cooperation
Preamble
The Preamble may follow the generally accepted formulation. However, the following items may be considered:
3.1 Inclusion of the tribal affiliation of the cooperators; and
3.2 Inclusion of the indigenous traditions, customs, knowledge systems and practices (ITCKSP) as part of the legal basis for cooperation not contrary to law, public policy and morals.
Name
The cooperators may exercise freedom in naming their cooperative, including the use of terms from local dialect in such name. The term ‘cooperative’ must however be part of the name in order to entitle the organization to the benefits of RA No. 6938.
Objectives and Purposes
An indigenous peoples cooperative may freely determine its objectives and purposes which are not contrary to law. In the context of social justice and equity, the cooperative shall give primary consideration to the provision of socio-economic benefits to its members, specially goods and services, in order to give them opportunity to increase their income, savings, investments, productivity and purchasing power. It shall, in addition provide opportunities for its members to acquire knowledge of their rights as indigenous peoples. Purely charitable purposes should be avoided.
Area of Operation
The indigenous peoples cooperative may choose its own area of operation. The principal office may be located within the ancestral domain of the members as defined by the members of the tribal community. The cooperative may likewise freely determine its business address. The ancestral domain of the concerned indigenous people may serve as the primary area of operation and the postal address of the cooperators may be established within this area.
Term of Existence
The 50-year maximum period of existence of a cooperative under RA No. 6938 may be replaced with an equivalent period according to the prevailing indigenous traditions, customs, knowledge systems and practices. The equivalent of 50 calendar years shall however be parenthetically indicated.
Names and Addresses of Cooperators
The name, tribal affiliation and address of each cooperator may be reflected under this title.
Common Bond of Membership
Sharing the same socio-cultural characteristics with a specific community of indigenous people identified by tribal affiliation, may serve as the common bond of membership in the cooperative.
Board of Directors
The Board of Directors may be elected and organized within the framework of indigenous leadership concepts and practices. A reasonable number of seats in the Board of Directors may be reserved for women.
Capitalization
The authorized share capital of the indigenous peoples may be in cash, or in terms of goods and services to be delivered to the cooperative.
Subscribed and Paid-Up Capital
Subscribed capital of members may be paid in cash, in kind or in services or any combination thereof.
4
FORMULATION OF THE COOPERATIVE BY-LAWS
Preamble
The construction of the Preamble of the By-Laws may follow the guidelines for the Preamble of the Articles of Cooperation. A number of members of the cooperative considered sufficient and acceptable under ITCKSPs may adopt the By-Laws.
Objectives and Purposes
Indigenous peoples cooperatives may be organized for any or all of the objectives as stated in Article VI of this Code, including but not limited to the following:
a) To develop a system of cooperatives among members of the indigenous peoples founded on their indigenous traditions, customs, knowledge systems and practices;
b) To serve as a conduit of assistance from various institutions for the operation and strengthening of indigenous peoples cooperatives;
c) to act as a catalyst for the socio-economic development of the indigenous peoples in particular and their overall development in general; and
d) To represent the members in any or all matters that effect their interest and welfare as indigenous peoples.
Membership
SECTION 1. Membership in the cooperative may be open to all members of the concerned community of indigenous peoples (tribe) who are of age according to indigenous traditions, customs, knowledge systems and practices.
SECTION 2. Application for Membership — (a) Applications for membership shall be done in writing. An application may be presented in any form which signifies intent to become a member of the cooperative. (b) Membership fees may be paid in cash or in kind and the terms of payment of unpaid subscribed capital may be agreed upon by the parties. (c) An applicant who is rejected by the Board of Directors may appeal his case to the next special or regular general assembly.
SECTION 3. Duties of a Member — The cooperative shall determine the duties of its members.
SECTION 4. Rights of Members — The basic rights of the members of the cooperative shall include the right to participate in deliberations during meetings; to vote on all matters brought before such meetings; to be elected to any position in the cooperative; to avail of the services of the cooperative without discrimination; and to examine the accounts and other records of the cooperative. The cooperative may set conditions for entitlement to vote or be voted upon.
SECTION 5. Liability of Members — A member shall be liable for the debts of the cooperative to the extent of his/her contribution to the share capital of the cooperative.
SECTION 6. Termination of Membership — Membership in the cooperative may be determined either by death, withdrawal or expulsion.
SECTION 7. Withdrawal — Notice of intent to withdraw from the cooperative shall be made in writing. The cooperative may determine the terms and conditions for withdrawal of membership.
SECTION 8. Expulsion — The cooperative may set conditions for the expulsion of any of its members. The right of the member to be heard shall, in all cases, be respected. In case of expulsion, the affected member shall have the right to appeal to the next special or regular general assembly whose decision shall be final.
SECTION 9. Appraisal and Payment of Member’s Earnings Upon Termination of Membership — The Board of Directors shall cause the appraisal and payment of whatever is due to a member upon termination of his/her membership. Payments shall be made in accordance with the policies laid down by the Board of Directors taking into consideration his/her liabilities to the cooperative.
Governance
SECTION 1. Membership Control — Final authority in the management and administration of the affairs of the cooperative is vested on the general assembly. Decisions of the general assembly must have the concurrence of at least a majority of members with voting rights present during the general assembly.
SECTION 2. The General Assembly — The general assembly of the cooperative shall be composed of members entitled to vote duly assembled for the purpose as defined by Article V of RA No. 6938.
SECTION 3. Powers of the General Assembly — The general assembly shall determine its powers based on indigenous traditions, customs, knowledge systems and practices and RA No. 6938.
SECTION 4. Annual General Assembly — The Board of Directors may determine the date and venue of the General Assembly preferably within 90 days after each fiscal year.
SECTION 5. Special General Assembly — A special assembly may be called by a majority of the members of the Board of Directors to consider urgent matters requiring immediate membership decision. The Board of Directors shall call the general assembly within a reasonable period from receipt of a written request of at least 10 percent of the total number of members entitled to vote; the Audit and Inventory Committee; the federation or union of which the cooperative assembly shall state the purpose for which it is to be held.
SECTION 6. Notice of General Assembly — Written or oral notice of a general assembly shall be served by the Secretary, through messenger or by mail, upon each member in his last known address or through an announcement in the local radio station or any other traditional system of calling a meeting. A written notice may be accompanied by the agenda.
SECTION 7. Fiscal Year — The cooperative may determine its own fiscal year according to the community’s prevailing indigenous traditions, customs, knowledge systems and practices.
SECTION 8. Agenda — The order of business for each annual meeting may be determined according to indigenous traditions, customs, knowledge systems and practices.
SECTION 9. Quorum at the General Assembly — The cooperative may determine its own quorum in the annual or special general assembly. Provided that such quorum shall not be less than 25% of the members with voting rights.
SECTION 10. Manner of Voting — No member of the cooperative is entitled to more than one vote regardless of the share capital owned. The cooperative may allow proxy voting, provided that proxies are duly authorized members of the immediate family of the member who seeks to vote by proxy. Action on all matters shall be by any manner that will truly and correctly reflect the decision of the membership.
SECTION 11. Board of Director and Number — The business of the cooperative shall be administered by the Board of Directors. The Board of Directors shall be composed of not less than 5 or more than 15 in odd numbers.
SECTION 12. Qualifications of, and Disqualifications for Directors — The cooperative may determine the qualifications and disqualifications of members of the Board of Directors.
SECTION 13. Election of Directors — Guided by indigenous traditions, customs, knowledge systems and practices, the general assembly may determine the manner of election of members of the Board of Directors. The term of the Board of Directors shall however be determined in accordance with existing laws, rules and regulations.
SECTION 14. Directors Meeting; Election of Officers — The members of the Board of Directors may determine the manner by which they will elect from among themselves a Chairperson and Vice-Chairperson. The Treasurer and Secretary who must not be members of the Board may be chosen by the general assembly or Board of Directors. Officers of the Board may be elected or appointed without any restrictions involving relationships either by affinity or consanguinity. The Board of Directors may determine the term of office of such elective or appointive officers. The Board may likewise determine the manner by which special and regular meetings of the Board are called.
SECTION 15. Quorum of Directors’ Meeting — Quorum may be determined by the Board according to indigenous traditions, customs, knowledge systems and practices; Provided, however, that action on all matters shall truly and correctly reflect the decision of the membership of the Board, communicated in writing or any other traditional system of communication.
SECTION 16. Vacancies — The cooperative shall determine the manner of filling up all vacancies in the Board and elective committees in accordance with indigenous traditions, customs, knowledge systems and practices.
SECTION 17. Removal of Directors and Committee Members — After having been given the opportunity to be heard, any elected director or committee member may be removed from office for cause by the general assembly.
SECTION 18. Powers and Duties of the Board — The Board of Directors as a body shall exercise general supervision of the affairs of the cooperative. It shall prescribe policies consistent with law, customary laws, the by-laws and resolutions of the general assembly.
SECTION 19. Audit and Inventory Committee — The general assembly shall determine the number, term of office and elect the members of an Audit and Inventory Committee.
SECTION 20. Qualifications and Disqualifications of Committee Members — The qualifications and disqualifications provided for Directors shall apply to the members of the various committees.
SECTION 21. Other Committees — The cooperative may form and/or create other committees and determine their powers and functions as the cooperative operations may require.
SECTION 22. Officers and their Duties — The cooperative shall determine the duties of its officers which may include the following:
Chairperson
a) Preside over meetings of the Cooperative and the Board of Directors;
b) Perform the duties usually done by a presiding officer;
c) Sign share and revolving fund certificates, contracts and such other papers of the cooperative which the Board may authorize and direct him/her to sign; and
d) Perform such other duties as the Board of Directors may prescribe.
Vice-Chairperson
In the absence or disability of the Chairperson, the Vice-Chairperson shall perform the duties of the Chairperson; provided, however, that in case of death, resignation or removal of the Chairperson, the Board may decide to elect his/her successor.
Treasurer
a) Take custody of all moneys, securities and financial papers of the cooperative;
b) Keep a complete record of its cash transactions which would serve as proof of his/her cash position at any given time and date;
c) As authorized by the Board of Directors, pay all money transactions and certify to the correctness of the cash position of the cooperative in all financial statements and reports submitted to the Board, General Assembly or the Authority; and IHCESD
d) Turn-over all moneys, securities, papers, books and all properties belonging to the cooperative that he/she may have in his/her possession upon election of his/her successor. Post an adequate bond of guarantees determined in accordance with indigenous traditions, customs, knowledge systems and practices, to assure the faithful performance of his/her duties. Perform the duties of the Secretary in the latter's absence or inability to perform his/her duties.
Secretary
a) Keep a complete list of all members and maintain a correct record/minutes of all meetings of the Board and the General Assembly;
b) Give notice of all meetings called;
c) Keep and maintain the stock and transfer book and serve as a custodian of the corporate seal of the cooperative;
d) Turn-over to his/her successor all books and properties in his/her possession belonging to the cooperative; and
e) Perform the duties of the Treasurer, in his/her absence or inability to perform his/her duties.
SECTION 23. Council of Elders/Leaders — The Council of Elders/Leaders refers to the indigenous leadership structure of the community composed of bonafide leaders acting individually or in a council depending on the prevailing indigenous traditions, customs, knowledge systems and practices. The Council of Elders/Leaders shall perform advisory functions to the cooperative in matters concerning customs, traditions, beliefs and mores. A member of the Council of Elders/Leaders may simultaneously serve as an elected officer or member of the Board.
SECTION 24. Liabilities of Directors, Officers and Committee Members — Directors, officers and committee members may be sanctioned in accordance with existing laws or customary laws for willful acts which are prejudicial to the interest of the cooperative.
SECTION 25. Management Staff and Other Personnel — The Board of Directors shall appoint the general manager and the latter may appoint the other members of the management staff subject to Board confirmation. The Board shall likewise determine their functions, tenure and compensation.
SECTION 26. Compensation — during the initial stage of the operation of the cooperative, where the cooperative has not yet established its financial capability, the concept of volunteerism in terms of rendering service to the cooperative may be adopted.
Capital Structure
SECTION 1. Sources of Funds — The cooperative may derive funds from whatever legal source which may include the share capital, revolving capital, capital reserves, loan capital, subsidies, grants and donations from local or foreign sources, savings in cash or in kind and other sources as may be authorized by law or indigenous traditions, customs, knowledge systems and practices.
SECTION 2. Share Capital and Stock Certificate — The par value of each capital share may de determined by the cooperative which shall not however be lower than P1.00 per share. Serially numbered Certificate of Stock may be issued to each member upon full payment of the subscription in cash or in kind. The Certificate shall contain the shareholder’s name, number of shares owned and the par value and shall be signed by the Chairperson and the Secretary of the cooperative. All issues and transfers shall be registered in the stock and transfer books. Shares of stock may be purchased, owned or held by persons who are eligible for membership. Earnings, which may be in cash or in kind, may be paid in the manner prescribed by the cooperative. Such earnings may be credited towards payment of subscriptions, outstanding accounts or additional shares or to the revolving fund of the cooperative.
SECTION 3. Transfer of Shares — The cooperative may determine the mechanics for transfer of shares taking into consideration indigenous traditions, customs, knowledge systems and practices. Transfer of shares, however, may not be binding to the cooperative until such transfer has been registered in its Stock and Transfer Book and the old certificates have been surrendered. The cooperative may likewise determine the conditions for replacement of certificates which have been lost or destroyed.
Allocation and Distribution of Net Surplus
SECTION 1. The cooperative may determine the distribution of net surplus at the end of the fiscal year. Portions of the net surplus may however be set aside as reserve fund, education and training funds and cultural facilities and activities fund. The remaining amount may be made available to the members in the form of earnings on share capital and patronage refund.
Miscellaneous
SECTION 1. Investment of Capital — The Board of Directors may determine the manner by which its capital may be invested considering the opportunities within the locality and other easily accessible places.
SECTION 2. Book of Accounts — The cooperative shall keep a book of accounts presented in a manner which is understandable to the members.
SECTION 3. Audit — The record of accounts of the cooperative shall be audited at least once a year by the Audit and Inventory Committee. The cooperative shall arrange an external audit at least once a year .
SECTION 4. Annual Report — The cooperative shall present a simplified annual report of its affairs to the general assembly, together with the audited financial statements, and submit a copy thereof to the Authority preferably within 90 days from the end of the fiscal year.
SECTION 5. Accounting System — The cooperative may adopt an accounting system taking into consideration the indigenous traditions, customs, knowledge systems and practices and generally accepted accounting principles.
SECTION 6. Settlement of Disputes — The cooperative, in consultation with the Council of Elders/Leaders, may adopt an acceptable system for the settlement of cooperative disputes in accordance with ITCKSPs and existing rules and regulations.
Amendments
SECTION 1. Amendments — Amendments to the Articles of Cooperation and By-Laws of the cooperative may be adopted by a majority vote of regular members with voting rights present during a general assembly called for the purpose.
The guidelines shall govern the procedures required to be undertaken in the area of the registration of IPCs with the CDA.
For information and guidance.
Adopted: 10 Jan. 1996
Chairman
GUIDELINES ON THE FORMULATION OF ARTICLES OF COOPERATION AND BY-LAWS FOR INDIGENOUS PEOPLE’S COOPERATIVES
Legal Basis
1.1 Provisions of R.A. No. 6938
1.1.1 Article 2. Declaration of Policy — It is the declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. The State shall encourage the private sector to undertake the actual formation and organization of cooperatives and shall create an atmosphere that is conducive to the growth and development of these cooperatives.
Towards this end, the government.....shall ensure the provision of technical guidance, financial assistance and their services to..... bring about a strong cooperative movement that is free from any conditions that might infringe upon the autonomy or organizational integrity of cooperatives.
1.1.2 Article 4. Cooperative Principles — Every cooperative shall conduct its affairs in accordance with Filipino culture and experience and the universally accepted principles of cooperation........
Definition of Terms
(Yet to be defined)
Formulation of Articles of Cooperation
Preamble
The Preamble may follow the generally accepted formulation. However, the following items may be considered:
3.1 Inclusion of the tribal affiliation of the cooperators; and
3.2 Inclusion of the indigenous traditions, customs, knowledge systems and practices (ITCKSP) as part of the legal basis for cooperation not contrary to law, public policy and morals.
The cooperators may exercise freedom in naming their cooperative, including the use of terms from local dialect in such name. The term ‘cooperative’ must however be part of the name in order to entitle the organization to the benefits of RA No. 6938.
An indigenous peoples cooperative may freely determine its objectives and purposes which are not contrary to law. In the context of social justice and equity, the cooperative shall give primary consideration to the provision of socio-economic benefits to its members, specially goods and services, in order to give them opportunity to increase their income, savings, investments, productivity and purchasing power. It shall, in addition provide opportunities for its members to acquire knowledge of their rights as indigenous peoples. Purely charitable purposes should be avoided.
The indigenous peoples cooperative may choose its own area of operation. The principal office may be located within the ancestral domain of the members as defined by the members of the tribal community. The cooperative may likewise freely determine its business address. The ancestral domain of the concerned indigenous people may serve as the primary area of operation and the postal address of the cooperators may be established within this area.
The 50-year maximum period of existence of a cooperative under RA No. 6938 may be replaced with an equivalent period according to the prevailing indigenous traditions, customs, knowledge systems and practices. The equivalent of 50 calendar years shall however be parenthetically indicated.
The name, tribal affiliation and address of each cooperator may be reflected under this title.
Sharing the same socio-cultural characteristics with a specific community of indigenous people identified by tribal affiliation, may serve as the common bond of membership in the cooperative.
The Board of Directors may be elected and organized within the framework of indigenous leadership concepts and practices. A reasonable number of seats in the Board of Directors may be reserved for women.
The authorized share capital of the indigenous peoples may be in cash, or in terms of goods and services to be delivered to the cooperative.
Subscribed capital of members may be paid in cash, in kind or in services or any combination thereof.
FORMULATION OF THE COOPERATIVE BY-LAWS
Preamble
The construction of the Preamble of the By-Laws may follow the guidelines for the Preamble of the Articles of Cooperation. A number of members of the cooperative considered sufficient and acceptable under ITCKSPs may adopt the By-Laws.
Indigenous peoples cooperatives may be organized for any or all of the objectives as stated in Article VI of this Code, including but not limited to the following:
a) To develop a system of cooperatives among members of the indigenous peoples founded on their indigenous traditions, customs, knowledge systems and practices;
b) To serve as a conduit of assistance from various institutions for the operation and strengthening of indigenous peoples cooperatives;
c) to act as a catalyst for the socio-economic development of the indigenous peoples in particular and their overall development in general; and
d) To represent the members in any or all matters that effect their interest and welfare as indigenous peoples.
SECTION 1. Membership in the cooperative may be open to all members of the concerned community of indigenous peoples (tribe) who are of age according to indigenous traditions, customs, knowledge systems and practices.
SECTION 2. Application for Membership — (a) Applications for membership shall be done in writing. An application may be presented in any form which signifies intent to become a member of the cooperative. (b) Membership fees may be paid in cash or in kind and the terms of payment of unpaid subscribed capital may be agreed upon by the parties. (c) An applicant who is rejected by the Board of Directors may appeal his case to the next special or regular general assembly.
SECTION 3. Duties of a Member — The cooperative shall determine the duties of its members.
SECTION 4. Rights of Members — The basic rights of the members of the cooperative shall include the right to participate in deliberations during meetings; to vote on all matters brought before such meetings; to be elected to any position in the cooperative; to avail of the services of the cooperative without discrimination; and to examine the accounts and other records of the cooperative. The cooperative may set conditions for entitlement to vote or be voted upon.
SECTION 5. Liability of Members — A member shall be liable for the debts of the cooperative to the extent of his/her contribution to the share capital of the cooperative.
SECTION 6. Termination of Membership — Membership in the cooperative may be determined either by death, withdrawal or expulsion.
SECTION 7. Withdrawal — Notice of intent to withdraw from the cooperative shall be made in writing. The cooperative may determine the terms and conditions for withdrawal of membership.
SECTION 8. Expulsion — The cooperative may set conditions for the expulsion of any of its members. The right of the member to be heard shall, in all cases, be respected. In case of expulsion, the affected member shall have the right to appeal to the next special or regular general assembly whose decision shall be final.
SECTION 9. Appraisal and Payment of Member’s Earnings Upon Termination of Membership — The Board of Directors shall cause the appraisal and payment of whatever is due to a member upon termination of his/her membership. Payments shall be made in accordance with the policies laid down by the Board of Directors taking into consideration his/her liabilities to the cooperative.
SECTION 1. Membership Control — Final authority in the management and administration of the affairs of the cooperative is vested on the general assembly. Decisions of the general assembly must have the concurrence of at least a majority of members with voting rights present during the general assembly.
SECTION 2. The General Assembly — The general assembly of the cooperative shall be composed of members entitled to vote duly assembled for the purpose as defined by Article V of RA No. 6938.
SECTION 3. Powers of the General Assembly — The general assembly shall determine its powers based on indigenous traditions, customs, knowledge systems and practices and RA No. 6938.
SECTION 4. Annual General Assembly — The Board of Directors may determine the date and venue of the General Assembly preferably within 90 days after each fiscal year.
SECTION 5. Special General Assembly — A special assembly may be called by a majority of the members of the Board of Directors to consider urgent matters requiring immediate membership decision. The Board of Directors shall call the general assembly within a reasonable period from receipt of a written request of at least 10 percent of the total number of members entitled to vote; the Audit and Inventory Committee; the federation or union of which the cooperative assembly shall state the purpose for which it is to be held.
SECTION 6. Notice of General Assembly — Written or oral notice of a general assembly shall be served by the Secretary, through messenger or by mail, upon each member in his last known address or through an announcement in the local radio station or any other traditional system of calling a meeting. A written notice may be accompanied by the agenda.
SECTION 7. Fiscal Year — The cooperative may determine its own fiscal year according to the community’s prevailing indigenous traditions, customs, knowledge systems and practices.
SECTION 8. Agenda — The order of business for each annual meeting may be determined according to indigenous traditions, customs, knowledge systems and practices.
SECTION 9. Quorum at the General Assembly — The cooperative may determine its own quorum in the annual or special general assembly. Provided that such quorum shall not be less than 25% of the members with voting rights.
SECTION 10. Manner of Voting — No member of the cooperative is entitled to more than one vote regardless of the share capital owned. The cooperative may allow proxy voting, provided that proxies are duly authorized members of the immediate family of the member who seeks to vote by proxy. Action on all matters shall be by any manner that will truly and correctly reflect the decision of the membership.
SECTION 11. Board of Director and Number — The business of the cooperative shall be administered by the Board of Directors. The Board of Directors shall be composed of not less than 5 or more than 15 in odd numbers.
SECTION 12. Qualifications of, and Disqualifications for Directors — The cooperative may determine the qualifications and disqualifications of members of the Board of Directors.
SECTION 13. Election of Directors — Guided by indigenous traditions, customs, knowledge systems and practices, the general assembly may determine the manner of election of members of the Board of Directors. The term of the Board of Directors shall however be determined in accordance with existing laws, rules and regulations.
SECTION 14. Directors Meeting; Election of Officers — The members of the Board of Directors may determine the manner by which they will elect from among themselves a Chairperson and Vice-Chairperson. The Treasurer and Secretary who must not be members of the Board may be chosen by the general assembly or Board of Directors. Officers of the Board may be elected or appointed without any restrictions involving relationships either by affinity or consanguinity. The Board of Directors may determine the term of office of such elective or appointive officers. The Board may likewise determine the manner by which special and regular meetings of the Board are called.
SECTION 15. Quorum of Directors’ Meeting — Quorum may be determined by the Board according to indigenous traditions, customs, knowledge systems and practices; Provided, however, that action on all matters shall truly and correctly reflect the decision of the membership of the Board, communicated in writing or any other traditional system of communication.
SECTION 16. Vacancies — The cooperative shall determine the manner of filling up all vacancies in the Board and elective committees in accordance with indigenous traditions, customs, knowledge systems and practices.
SECTION 17. Removal of Directors and Committee Members — After having been given the opportunity to be heard, any elected director or committee member may be removed from office for cause by the general assembly.
SECTION 18. Powers and Duties of the Board — The Board of Directors as a body shall exercise general supervision of the affairs of the cooperative. It shall prescribe policies consistent with law, customary laws, the by-laws and resolutions of the general assembly.
SECTION 19. Audit and Inventory Committee — The general assembly shall determine the number, term of office and elect the members of an Audit and Inventory Committee.
SECTION 20. Qualifications and Disqualifications of Committee Members — The qualifications and disqualifications provided for Directors shall apply to the members of the various committees.
SECTION 21. Other Committees — The cooperative may form and/or create other committees and determine their powers and functions as the cooperative operations may require.
SECTION 22. Officers and their Duties — The cooperative shall determine the duties of its officers which may include the following:
Chairperson
a) Preside over meetings of the Cooperative and the Board of Directors;
b) Perform the duties usually done by a presiding officer;
c) Sign share and revolving fund certificates, contracts and such other papers of the cooperative which the Board may authorize and direct him/her to sign; and
d) Perform such other duties as the Board of Directors may prescribe.
Vice-Chairperson
In the absence or disability of the Chairperson, the Vice-Chairperson shall perform the duties of the Chairperson; provided, however, that in case of death, resignation or removal of the Chairperson, the Board may decide to elect his/her successor.
Treasurer
a) Take custody of all moneys, securities and financial papers of the cooperative;
b) Keep a complete record of its cash transactions which would serve as proof of his/her cash position at any given time and date;
c) As authorized by the Board of Directors, pay all money transactions and certify to the correctness of the cash position of the cooperative in all financial statements and reports submitted to the Board, General Assembly or the Authority; and IHCESD
d) Turn-over all moneys, securities, papers, books and all properties belonging to the cooperative that he/she may have in his/her possession upon election of his/her successor. Post an adequate bond of guarantees determined in accordance with indigenous traditions, customs, knowledge systems and practices, to assure the faithful performance of his/her duties. Perform the duties of the Secretary in the latter's absence or inability to perform his/her duties.
Secretary
a) Keep a complete list of all members and maintain a correct record/minutes of all meetings of the Board and the General Assembly;
b) Give notice of all meetings called;
c) Keep and maintain the stock and transfer book and serve as a custodian of the corporate seal of the cooperative;
d) Turn-over to his/her successor all books and properties in his/her possession belonging to the cooperative; and
e) Perform the duties of the Treasurer, in his/her absence or inability to perform his/her duties.
SECTION 23. Council of Elders/Leaders — The Council of Elders/Leaders refers to the indigenous leadership structure of the community composed of bonafide leaders acting individually or in a council depending on the prevailing indigenous traditions, customs, knowledge systems and practices. The Council of Elders/Leaders shall perform advisory functions to the cooperative in matters concerning customs, traditions, beliefs and mores. A member of the Council of Elders/Leaders may simultaneously serve as an elected officer or member of the Board.
SECTION 24. Liabilities of Directors, Officers and Committee Members — Directors, officers and committee members may be sanctioned in accordance with existing laws or customary laws for willful acts which are prejudicial to the interest of the cooperative.
SECTION 25. Management Staff and Other Personnel — The Board of Directors shall appoint the general manager and the latter may appoint the other members of the management staff subject to Board confirmation. The Board shall likewise determine their functions, tenure and compensation.
SECTION 26. Compensation — during the initial stage of the operation of the cooperative, where the cooperative has not yet established its financial capability, the concept of volunteerism in terms of rendering service to the cooperative may be adopted.
SECTION 1. Sources of Funds — The cooperative may derive funds from whatever legal source which may include the share capital, revolving capital, capital reserves, loan capital, subsidies, grants and donations from local or foreign sources, savings in cash or in kind and other sources as may be authorized by law or indigenous traditions, customs, knowledge systems and practices.
SECTION 2. Share Capital and Stock Certificate — The par value of each capital share may de determined by the cooperative which shall not however be lower than P1.00 per share. Serially numbered Certificate of Stock may be issued to each member upon full payment of the subscription in cash or in kind. The Certificate shall contain the shareholder’s name, number of shares owned and the par value and shall be signed by the Chairperson and the Secretary of the cooperative. All issues and transfers shall be registered in the stock and transfer books. Shares of stock may be purchased, owned or held by persons who are eligible for membership. Earnings, which may be in cash or in kind, may be paid in the manner prescribed by the cooperative. Such earnings may be credited towards payment of subscriptions, outstanding accounts or additional shares or to the revolving fund of the cooperative.
SECTION 3. Transfer of Shares — The cooperative may determine the mechanics for transfer of shares taking into consideration indigenous traditions, customs, knowledge systems and practices. Transfer of shares, however, may not be binding to the cooperative until such transfer has been registered in its Stock and Transfer Book and the old certificates have been surrendered. The cooperative may likewise determine the conditions for replacement of certificates which have been lost or destroyed.
SECTION 1. The cooperative may determine the distribution of net surplus at the end of the fiscal year. Portions of the net surplus may however be set aside as reserve fund, education and training funds and cultural facilities and activities fund. The remaining amount may be made available to the members in the form of earnings on share capital and patronage refund.
SECTION 1. Investment of Capital — The Board of Directors may determine the manner by which its capital may be invested considering the opportunities within the locality and other easily accessible places.
SECTION 2. Book of Accounts — The cooperative shall keep a book of accounts presented in a manner which is understandable to the members.
SECTION 3. Audit — The record of accounts of the cooperative shall be audited at least once a year by the Audit and Inventory Committee. The cooperative shall arrange an external audit at least once a year .
SECTION 4. Annual Report — The cooperative shall present a simplified annual report of its affairs to the general assembly, together with the audited financial statements, and submit a copy thereof to the Authority preferably within 90 days from the end of the fiscal year.
SECTION 5. Accounting System — The cooperative may adopt an accounting system taking into consideration the indigenous traditions, customs, knowledge systems and practices and generally accepted accounting principles.
SECTION 6. Settlement of Disputes — The cooperative, in consultation with the Council of Elders/Leaders, may adopt an acceptable system for the settlement of cooperative disputes in accordance with ITCKSPs and existing rules and regulations.
SECTION 1. Amendments — Amendments to the Articles of Cooperation and By-Laws of the cooperative may be adopted by a majority vote of regular members with voting rights present during a general assembly called for the purpose.