sources of funds of a cooperative in the philippines

8/11/2019 Sources of Funds of a Cooperative in the Philippines

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Sources of Funds of aCooperative

1. Share Capital

The member contributes in formof shares with a par value of anamount stated in the by-laws

The member shall subscribe fora minimum number of shares ina accordance with the by-laws


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1. Share Capital

Subscriptions may be paid in cashor installment basis depending uponthe agreement

No member of a cooperative other

than a cooperative shall own or holdmore than 20 of the subscribedshare capital of the cooperative


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2. !evolving Capital

"efer payment of interest inshare capital # patronage refund

The $oard shall issue a revolving

capital certi%cate with serialnumber& name& amount # rate ofinterest to be paid at the time ofretirement


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'. "eposits of (embers

The cooperative may receivetwo )inds of deposits*

a+ Savings

b+Time deposit


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,. $orrowings

The cooperative may borrow frommembers at terms comparable orless onerous from loans outside ofmembership or eternal sources

t must not compromise thecooperative/s autonomy andindependence


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. ees

(embership and transfer fees&and others

. Subsidies& 3rants& "onations

The cooperative may acceptsubsidies& grants and donationsfrom members& foreign and

domestic sources.


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How is the net surplus of a cooperativeallocated & distributed? (RA 693!

4!TC56 7. N6T S8!958S

The net surplus of a cooperativeshall be determined in accordancewith its by-laws.

Net surplus shall be determined atthe close of every %scal year andat such other time as may beprescribed by the by-laws.


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4!TC56 7. N6T S8!958S :cont.+

The net surplus shall not be construedas pro%t but as ecess of paymentsmade by the members for the loansborrowed& or the goods and services

bought by them from the cooperativeand which shall be deemed to havebeen returned to them if the same isdistributed as prescribed therein.


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4!TC56 7;.

1. 4n amount for the reserve fundwhich shall be at least 10 of the

net surplus*a. The reserve fund shall be used for

the stability of the cooperative andto meet net losses in its operations.


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b. :cont.+ Such sum of the reserve fundin ecess of the share capital may

be used at anytime for any pro?ectthat would epand the operations ofthe cooperative upon the resolution

of the general assemblyc. 8pon dissolution of the cooperative&

the reserve fund shall not bedistributed among the members.


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c. :cont.+ The general assembly may resolve*

i. To establish usufructuary trust fund for the

bene%t of any federation or union to whichthe cooperative is a@liated.

ii. To donate& contribute& or otherwise dispose ofthe amount for the bene%t of the communitywhere the cooperative operates. f themembers can not decide upon the disposal ofthe reserve fund& the same shall go to thefederation or union to which the cooperativeis a@liated.


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2. 4n amount for the education # trainingfund& shall not be more than 10 of

net surplus. The by-laws may providethat certain fees or a portion thereof becredited to such fund.

'. 4n optional fund& a land and buildingfund& community development fund&and other necessary fund& the total ofwhich should not eceed 10 of netsurplus.


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,. The remaining net surplus shall be

made available to the members in theform of interest not to eceed thenormal rate of return on investmentsand patronage refund.

The sum allocated for patronagerefund shall be made available at thesame rate to all patrons of thecooperative in proportion to their

individual patronage& provided that*


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a. n the case of a member patronwith paid up share capitalcontributions& hisAherproportionate amount ofpatronage refund shall be paid to

himAher unless sAhe agrees tocredit the amount to hisAheraccount as additional sharecapital contribution.


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b. n the case of a member patronwith unpaid share capitalcontribution& hisAherproportionate amount ofpatronage refund shall be

credited to hisAher account untilhisAher share capital contributionhas been fully paid up.


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c. n case of non-member patron& hisAherproportionate amount of patronage refund

shall be set aside in a general fund forsuch patrons and shall be allocated toindividual non-member patrons only uponreBuest and presentation of evidence that

the amount is hisAher patronage.The amount so allocated shall be creditedto such patron toward payment of theminimum capital contribution formembership.


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c. :cont.+ hen a sum eBual to thisamount has accumulated atanytime within a period speci%edin the by-laws& such patron shall bedeemed and become a member of

the cooperative if heAshe so agreesor reBuests and complies with theprovisions of the by-laws foradmission of membership.


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d. f within any time periodprescribed the by-laws&subscribers with not fully paidsubscribed share capital # non-member patrons who has Buali%ed

for membership but does notreBuest or agree to become amember or fails to comply with themembership&


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d. :cont.+ the amount soaccumulated or credited to theiraccount together with any part ofthe general fund for non-memberpatrons shall be credited to the

reserve fund or to the education #training fund of the cooperative&at the option of the cooperative.


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C"A #e$orandu$ Circular %o') "ated '6 Sept '

Consistent with the accounting principlesof conservatism and the going concern& all

losses incurred by the cooperative in itsbusiness operations shall be chargedagainst the !eserve und. n the event thatthe !eserve und reDects a debit balance&

the allocation # distribution of net surplus ofthe succeeding %scal years are modi%ed inconsonance with C"4 (emorandum CircularNo. 2000-07 "ated 2 Sept. 2000& vi>*


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a. !eserve und = not more than ofthe net surplus

b. Cooperative 6ducation # Training und= not more than of the net surplus

c.


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The mentioned modi%ed

distribution # allocation of netsurplus shall be enforced andimplemented until such time

that the debit balance of the!eserve und account shallhave been fully oEseted.

sources of funds of a cooperative in the philippines

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