Starting a cooperative in the Philippines is a great way to build a business that grows with the community. Success is shared, and everyone contributes. By forming a cooperative, you tap into the collective strength and resources of like-minded individuals to achieve common goals and create a sustainable enterprise.

Whether you’re focused on providing services, supporting local industries, or driving economic growth, a cooperative offers endless possibilities for making an impact. By embracing principles like open membership, democratic control, and community concern, your cooperative can empower individuals to create sustainable solutions that benefit your community and beyond.      

Ready to start your cooperative? Read on, as this comprehensive guide will walk you through the entire CDA registration process in the Philippines, step by step.

What is a Cooperative?

A cooperative, often abbreviated as “coop,” is defined by the Philippine Cooperative Code of 2008 (R.A. 9520) as “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 (Article 3).” 

As can be gleaned from the legal definition, a cooperative is a business structure owned and run by its members, who come and work together to achieve collective goals through a jointly owned and democratically controlled enterprise.

Purposes of Cooperatives

A cooperative may be organized and registered for any or all of the following purposes (Article 6, Cooperative Code):

  • encourage thrift and savings mobilization among the members;
  • generate funds and extend credit to the members for productive and provident purposes;
  • encourage among members systematic production and marketing;
  • provide goods and services and other requirements to the members;
  •  develop expertise and skills among its members;
  • acquire lands and provide housing benefits for the members;
  • insure against losses of the members;
  • promote and advance the economic, social and educational status of the members;
  • establish, own, lease or operate cooperative banks, cooperative wholesale and retail complexes, insurance and agricultural/industrial processing enterprises, and public markets;
  • coordinate and facilitate the activities of cooperatives;
  • advocate for the cause of the cooperative movements;
  • ensure the viability of cooperatives through the utilization of new technologies;
  • encourage and promote self-help or self-employment as an engine for economic growth and poverty alleviation; and
  • undertake any and all other activities for the effective and efficient implementation of the provisions of the Code.

Top Advantages and Disadvantages of Cooperatives

Cooperatives provide benefits like democratic shared profits and community focus but face challenges like slow decision-making, limited capital, and potential conflicts. 

  • Democratic Control. In a cooperative where economic interests and democratic practices are at the forefront, you and other members have equal voting rights and a say in decision-making. 
  • Shared Benefits. You and your members can enjoy a fair share of the cooperative’s financial gains, which are distributed based on the level of participation or availment of services. 
  • Community Focus. Your cooperative is not just for your and other members’ benefit—it is also dedicated to supporting local or specific communities, e.g., jeepney drivers and operators, farmers, etc. 

 

Cooperatives, while offering many benefits, also face challenges such as slow decision-making, limited access to capital, and the potential conflicts among members.

  • Decision-Making Challenges. In a cooperative, you may experience slower decision-making processes, as decisions normally require consensus or a majority vote from all members. 
  • Limited Access to Capital. Since cooperatives do not issue shares of stock, the capital primarily comes from you and your members’ contributions, something that can limit your ability to expand or fund large-scale projects.
  • Potential for Conflicts. With many members and elected officers involved, you may encounter differing opinions or interests on certain issues. If not addressed quickly and effectively, these conflicts can complicate the cooperative’s operations.

Types of Cooperatives in the Philippines

In the Philippines, cooperatives are mainly classified based on the nature of membership, and include:

Primary Cooperatives

Primary cooperatives are formed by individual members of natural persons who want to meet shared economic, social, and cultural needs. They can focus on certain areas, such as consumer, producer, worker, or multipurpose needs, e.g., consumer cooperatives for bulk purchasing of goods or worker cooperatives where employees own and manage the business. 

Secondary Cooperatives

Secondary cooperatives, on the other hand, are made up of primary cooperatives and provide services like pooling funds and resources for large projects, training, and other advocacy activities, e.g., a federation of cooperatives that works on sector-wide issues. 

Tertiary Cooperatives

Tertiary cooperatives are formed by secondary cooperatives to support the cooperative movement at a national level. They usually offer technical assistance, coordinate with the government, and advocate for cooperative-friendly policies, such as national cooperative unions or alliances.

Other Types of Cooperatives

Cooperatives in the Philippines can also be categorized by purpose: Credit cooperatives offer financial services, consumer cooperatives provide goods at lower prices, producer cooperatives focus on production, service cooperatives deliver services like healthcare or transportation, and multipurpose cooperatives combine several activities to meet diverse needs.

CDA Registration

CDA Registration is the process of officially registering a cooperative with the Cooperative Development Authority (CDA) in the Philippines. This registration is mandatory for the entity’s legal recognition and operation, access to government support, and enjoyment of other benefits. Once CDA-registered, a cooperative obtains a CDA Certificate of Registration (COR). 

Cooperative Development Authority (CDA)

The Cooperative Development Authority (CDA) of the Philippines is tasked with promoting and regulating cooperatives in the country. Its mandate includes registering and supervising cooperatives, enforcing the Cooperative Code and other related laws, and providing support through education, training, and technical assistance. 

While the CDA main office is at 827 Aurora Blvd., Immaculate Conception, Quezon City, prospective cooperatives must submit their registration application to the respective CDA Extension Office having jurisdiction over their registered addresses.  

CDA Registration Eligibility and General Requirements

To register a cooperative with the CDA, at least 15 Filipino members must meet eligibility requirements, complete a seminar, and submit key documents. 

Eligibility Criteria

Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having a common bond of interest, and are actually residing or working in the intended area of operation, may organize a primary cooperative.

Economic Survey or General Statement

For CDA registration, you need to submit an economic survey or general statement. The survey must include details on the cooperative’s structure, purposes, economic feasibility, area of operation (i.e., specific barangays or municipalities), initial and potential members, and other relevant information. 

Pre-Registration Seminar

Each of the initial and prospective members of a primary cooperative must complete a Pre-Membership Education Seminar (PMES), which educates about the principles, laws, and management of cooperatives. It is conducted by the CDA or any accredited training provider. Upon completion, participants receive a Certificate of Attendance, which is required for cooperative registration.

Articles of Cooperation

The Articles of Cooperation (AOC), required for cooperative registration, must be signed by all organizers and duly notarized. These articles include the cooperative’s name (which must include “cooperative”), its purpose, business scope, term of existence (i.e., up to 50 years), area of operation, principal office address, names and addresses of the registrants, common bond of membership, list of directors, and details on share capital, including the minimum required capital and subscriptions.

Bylaws of the Cooperative

The bylaws, filed with the Articles of Cooperation, outline the rules for how the cooperative operates, including membership requirements, rights and responsibilities, share transfer rules, meeting procedures, roles of members and officers, fundraising, loan procedures, and profit-sharing. They also include guidelines for dispute resolution, amending the bylaws, and other operational details.

Paid-Up Capital Requirements

The paid-up capitalization requirement for primary cooperatives is at least Two Thousand Pesos (PHP 2,000). For secondary and tertiary cooperatives, the required paid-up capitalization is usually determined based on the activities outlined in the economic survey submitted by the registering cooperative.

Treasurer’s Affidavit or Certification

A certification under oath by the treasurer is also required. It confirms that at least 25% of the authorized share capital has been subscribed, and at least 25% of the total subscription has been paid. This ensures that the cooperative has met the minimum financial requirements for registration and operations. 

Officers’ Surety Bond

The Articles of Cooperation must be submitted along with the bonds of the accountable officers to ensure financial responsibility and accountability within the cooperative. These bonds serve as a safeguard, protecting the cooperative from any potential mismanagement or financial misconduct by its officers.

How to Process CDA Registration in the Philippines

Obtaining CDA registration in the Philippines involves several steps: reserving a cooperative name, filing necessary documents, obtaining permits, securing tax registration, and opening a bank account. 

1. Verify and Reserve a Name for the Cooperative.

To reserve your cooperative’s name, you must submit a request to the CDA to ensure it is unique and not similar to existing ones. Remember, the word “Cooperative” must be included in the suggested name.

2. File the Application with CDA.

After the name verification and reservation, prepare the required documentary requirements and submit them to the CDA Extension Office for review and approval. Take note that additional documents may be needed based on the cooperative type. Pay also the registration fees. 

3. Wait for Approval and Issuance of Certificate.

The CDA will review your submitted documents for completeness and compliance with legal requirements. Once the application is approved, the CDA will issue a Certificate of Registration (COR), officially recognizing your cooperative. 

4. Obtain Business Permits from LGUs.

With the CDA COR and other requirements, apply for a Barangay Business Permit or Clearance at the Barangay Hall where your cooperative is located. Afterward, proceed to the City or Municipal Business Permit and Licensing Office (BPLO) for the Mayor’s Permit. You also need to obtain other permits and clearances, such as the Locational Clearance, Zoning Certificate, Fire Safety and Inspection Certificate (FSIC), and Sanitary Permit.

5. Secure a BIR Certificate of Registration (COR). 

Register also with the Bureau of Internal Revenue (BIR) to obtain your BIR Certificate of Registration (COR), which contains the cooperative’s Taxpayer Identification Number (TIN), VAT registration (if applicable), and other tax details. The cooperative must also register its books of accounts, print official receipts and invoices according to the BIR standards, and comply with other tax regulations.

6. Open a Bank Account Under the Cooperative’s Name.

To start operations, open a bank account in the cooperative’s name. This account will handle all financial transactions and ensure proper fund management and transparency. 

7. Process Employer Registrations with Statutory Agencies. 

Finally, register the cooperative with statutory agencies such as the Social Security System (SSS), PhilHealth (PHIC), and Pag-IBIG Fund (HDMF) to comply with labor laws and provide employee benefits.

CDA Registration Fees

The CDA Memorandum Circular No. 2016-08 has updated the registration fee schedule for cooperatives. Name reservation fees range from PHP 100 to PHP 300, depending on the duration. Primary cooperatives pay a registration fee of PHP 500, while secondary and tertiary cooperatives pay PHP 2,000 and PHP 3,000, respectively. Laboratory cooperatives now require a PHP 50 registration fee, which was previously free.

Other CDA Registration FAQs

For your reference, here are the frequently asked questions about CDA registration in the Philippines, along with their answers: 

1. What is the minimum number of members required to form a cooperative?

A primary cooperative must have at least fifteen (15) natural persons who are of legal age and Filipino citizens.

2. Can government officials and employees join a cooperative?

Yes, but with conditions: (a) government and CDA officers are disqualified from being elected or appointed to any cooperative position; (b) elected government officials, except barangay officials, cannot serve as officers or directors of cooperatives; and (c) government employees may use official time for cooperative duties, provided it does not interfere with their office’s operations.

3. Does a cooperative follow the typical organizational structure?

Yes, a cooperative is expected to have a general assembly, a board of directors, a set of officers, a committee system, hired management, and paid employees for its day-to-day operations. 

4. Who can serve on a cooperative’s Board of Directors?

Any regular member who meets the qualifications and is not disqualified under cooperative laws can be elected to the board.

5. What books must cooperatives maintain and make available to members?

Cooperatives must keep and allow access to the Cooperative Code of the Philippines, CDA regulations, member register, minutes of meetings, share books, financial statements, and any other documents required by law or cooperative bylaws.

6. Are cooperatives required to undergo an Annual Audit?

Yes, cooperatives must have an independent annual audit conducted by a qualified auditor who is a member of a recognized professional accounting or cooperative auditor’s association.

7. Is an Annual Report required?

Yes, cooperatives must submit an annual report to each member, their federation/union, and the CDA. Failure to submit the report may result in the cancellation of the cooperative’s registration.

8. Can the CDA intervene on behalf of cooperative members?

If the board fails to convene regular or special general assembly meetings, the CDA can, upon a petition from 10% of the members, order the board to call for such meetings or hold special meetings to report audit or investigation results.

9. How soon must the CDA act on the registration application?

The CDA must act on a registration application within 30 days. If no action is taken within that period, the application is automatically approved, unless the applicant caused the delay.

10. What to do if the CDA application is denied?

If your application is denied, you can appeal to the Office of the President. If the Office of the President fails to act within 90 days from the filing of the appeal, the application is considered approved. 

11. What are the general privileges enjoyed by cooperatives?

These privileges are:

  • The right to deposit valuables in government offices free of charge;
  • Free use of space in government offices for cooperative members who are government employees;
  • Certain cooperatives, like those offering cold storage or transport services, can open membership to all qualified individuals in their operation areas;
  • Preferential rights in supplying government offices with produce, receiving fertilizer and rice allocations, using facilities for shipping goods, and managing public markets;
  • Access to loans, credit lines, and rediscounting from government financial institutions such as Land Bank and DBP;
  • Exemption from prequalification requirements in government bidding processes;
  • The right to be represented for free in legal suits by the provincial or city fiscal or the Office of the Solicitor General.

… and you might just need our assistance.

At FilePino, we simplify the process of registering your cooperative, ensuring compliance with all legal requirements. Our team of experts provides end-to-end support—from registration to regulatory compliance—so you can focus on your investments and growth strategies. 

Ready to register a Cooperative in the Philippines? Set up a consultation with FilePino today! Call us at (02) 8478-5826 (landline) and 0917 892 2337 (mobile) or send an email to info@filepino.com.