Edited by-laws for Existing Coops

8/6/2019 Edited by-laws for Existing Coops

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BY-LAWSof the

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned Filipino citizens, all of legal age and residents ofthe Philippines, representing the majority of the members of the CARMENGOVERNMENT OFFICIALS AND EMPLOYEES MULTI-PURPOSECOOPERATIVE(CARGOE MPC), a primary MULTI-PURPOSE cooperative,do hereby adopt the following Code of By-laws.

ARTICLE IPURPOSES

Section 1. Purposes. - The objectives and purposes of thisCooperative are those set forth in its Articles of Cooperation.

ARTICLE IIMEMBERSHIP

Section 2. Membership.- This Cooperative may have regular andassociate memberships.

A regular member is one who falls within the common bond ofmembership and is entitled to all the rights and privileges of membership asprovided for in this By-Laws. An associate member is one who does not fallwithin the common bond of membership of this Cooperative and is entitledto all the rights and privileges of membership, subject to limitationsprovided herein.

Section 3. Qualifications for Membership. - The regular

membership of this Cooperative is open to all natural persons who areGOVERNMENT OFFICIALS AND EMPLOYEES INCLUDING COOPERATIVESTAFF AND PERSONNEL, Filipino citizen, of legal age, with capacity tocontract, and has the following qualifications:

a) Completed the prescribed pre-membership education training;

b) Undertake to uphold the By-laws, policies, guidelines, rules andregulations promulgated by the board of directors and the generalassembly;

c) Paid the required membership fee; and

d) Paid the required initial minimum share capital or initialinvestment.

Any natural person who does not fall within the common bond ofmembership of this Cooperative may be accepted as associate member:Provided, That such person meets all the other qualifications required in this

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Section: Provided further, That the application follows the process requiredin this By-Laws.

Section 4.Application for Membership. - An applicant for regularmembership shall file a duly accomplished form with the Board of Directorswho shall accept or deny it within 30 days from the date of filing. The Boardof Directors shall devise a form for the purpose which shall, aside from thepersonal data of the applicant, include the duty of a member to participatein all capital build-up and savings mobilization programs of the Cooperativeand such other information as may be deemed necessary.

No application for membership shall be given due course if notaccompanied with a membership fee of ONE HUNDRED PESOS(P100.00) and the payment of at least the minimum share capitalcontribution required herein, which shall be refunded in full to the applicantin case of disapproval.

Section 5.Minimum Share Capital Subscription. - An applicantfor regular membership shall subscribe at least TWENTY (20) commonshares and pay the value of at least FIVE HUNDRED PESOS (P 500.00)share/s.

However, no regular member shall own or hold more than ten percent

(10%) of the total subscribed share capital of the Cooperative. The Board ofDirectors shall issue membership certificate and subscription agreementwith such terms and conditions as may be deemed equitable.

Section 6.Appeal. - An applicant whose application was denied bythe Board of Directors may appeal to the general assembly by giving noticeto the Secretary of the Cooperative within thirty (30) days before the nextGeneral Assembly meeting, whose decision on the matter shall be final.

Section 7. Duties and Responsibilities of a Member. - Everymember shall have the following duties:

a) Pay the share capital subscription as it falls due and toparticipate in the capital build-up and savings mobilizationactivities of the Cooperative;

b) Patronize the Cooperatives businesses and services;

c) Participate in the membership education programs;

d) Attend and participate in the deliberation of all matters takenduring general assembly meetings;

e) Observe and obey all lawful orders, decisions, rules and

regulations adopted by the Board of Directors and the generalassembly; and

f) Promote the goals and objectives of the Cooperative, thesuccess of its business, the welfare of its members and thecooperative movement in general.

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Section 8.Member Entitled to Vote. - Any regular member whomeets the following conditions is a member entitled to vote:

a) Paid the value of at least FIVE (5) share/s;

b) Not delinquent in the payment of his share capitalsubscriptions and other accounts or obligations;

c) Not violated any provision of this By-laws, the terms andconditions of the subscription agreement; and the decisions,guidelines, rules and regulations promulgated by the Board ofDirectors and the general assembly;

d) Completed the basic orientation training program prescribed bythe Board of Directors; and

e) Participates in the affairs of the Cooperative and patronize itsbusinesses.

Section 9.Rights of a Member. - A member entitled to vote shallhave the following rights:

a) Participate and vote on all matters deliberated upon duringgeneral assembly meetings;

b) Seek any elective or appointive position, subject to theprovisions of this By-laws and the Philippine Cooperative Code of2008;

c) Avail himself of the services of the Cooperative, subject tocertain conditions as may be prescribed by the Board of Directors;

d) Inspect and examine the books of accounts, the minutes books,the share register, and other records of the Cooperative during

office hours; and

e) Such other rights and privileges as may be provided by theGeneral Assembly.

An associate member is entitled to the rights under this Section,except the right to vote and be voted upon.

Section 10. Liability of Members. - A member shall be liable forthe debts of the Cooperative only to the extent of his subscribed sharecapital.

Section 11. Termination of Membership. Termination ofmembership, which may be automatic, voluntary or involuntary, shall havethe effect of extinguishing all rights of a member in the Cooperative or itsassets, subject to the pertinent provisions of this By-laws and as may beprovided by the general assembly.

a) Automatic Termination of Membership. The death, insanity, permanent incapacity or

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judicial declaration by a competent court of the insolvency of amember shall be considered an automatic termination of hismembership in the Cooperative.

b) Voluntary Termination. A membermay, for any reason, withdraw his membership from theCooperative by giving a 60-day notice to the Board of Directors.However, no member shall be allowed to withdraw or terminatehis membership during any period in which he has any pendingobligation with the Cooperative.

c) Involuntary Termination. A membermay be terminated by a vote of the majority of all the members ofthe Board of Directors for any of the following causes:

1) When he has not patronized theservices/businesses of the Cooperative for more than twelve(12) months;

2) When he has continuously failed tocomply with his obligations for more than twelve (12) months;

3) When he has violated any provisionof this By-laws and the rules promulgated by the Cooperative;and

4) For any act or omission injurious or

prejudicial to the interest or the welfare of the Cooperative.

Section 12. Manner of Involuntary Termination. The Board ofDirectors shall notify in writing the member who is being considered fortermination and shall give him the opportunity to be heard.

After hearing, the Board of Directors shall render its decision inwriting within thirty (30) days and the same shall be given to such memberby the Secretary of the Board, personally or by registered mail. Thedecision of the Board shall be appealable within thirty (30) days from receiptthereof to the general assembly whose decisions on the matter shall befinal.

Pending resolution by the general assembly, his membership remainsvalid and in force.

However, the general assembly may opt to create an appeal andgrievance committee, the members of which shall serve for a period of one(1) year and shall decide appeals on membership application within thirty(30) days upon receipt thereof. If the committee fails to decide within theprescribed period, the appeal is deemed approved in favor of the applicant.

Section 13. Refund of Share Capital Contribution. - A memberwhose membership is terminated shall be entitled to a refund of his share

capital contribution and all other interests in the Cooperative. However,such refund shall not be made if upon payment, the value of the assets ofthe Cooperative would be less than the aggregate amount of its debts andliabilities exclusive of his share capital contribution. In lieu of cash, theCooperative shall issue a certificate of indebtedness to theresigned/terminated member. In which case, the resigned/terminatedmember shall continue to be entitled to the interest of his share capitalcontributions. Upon the acceptance of his withdrawal or approval of his

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resignation/termination, however, he losses his right to attend, participateand vote in any meeting of the board of directors or the general assembly.

ARTICLE IIIGOVERNMENT

Section 14. The General Assembly. - The general assembly iscomposed of all the members entitled to vote and is the highest governingbody of the Cooperative.

Section 15. Powers of the General Assembly. - Subject to theprovisions of the Republic Act No. 9520 and the rules issued thereunder, thegeneral assembly, duly assembled, shall have the following powers:

a) To adopt and amend its Articles of Cooperation and By-laws, in

accordance with law;

b) To elect, appoint or remove for cause any member of the board ofdirectors, officer or committee member of the Cooperative;

c) To review, modify, reject or approve developmental plans andprograms of the cooperative;

d) To review and pass upon the reports of the Board of Directors,Officers and committees;

e) To review, modify, reject or approve any substantial change in the

financial and operational policies of the Cooperative;

f) To adopt a Cooperative seal; and

g) Exercise all other powers as may be authorized by law and theConstitution.

Section 16. Meetings. - Meetings of the general assembly, board ofdirectors and committees may be regular or special. All proceedings andbusinesses undertaken at any meeting of the general assembly or Board ofDirectors, if within the powers or authority of the Cooperative, there being aquorum, shall be valid.

Section 17. Regular General Assembly Meeting. The annualregular meeting of the general assembly shall be held at the principal officeof the cooperative or at any place within its area of operations within ninety(90) days after the close of each fiscal year.

Section 18. Special General Assembly Meeting. - The Board ofDirectors may, by a majority vote of all its members, call a special generalassembly meeting at any time to consider urgent matters requiringimmediate membership decision. The Board of Directors must likewise calla special general assembly meeting withinone (1) month from receipt of awritten request from:

a) at least ten (10) percent of the total number of members entitledto vote; or

b) the Audit Committee; or

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c) the Federation or Union to which the Cooperative is a member, or

d) the Cooperative Development Authority.

Section 19. Notice of Meeting. - All notices of meetings shall be inwriting and the date, time and place thereof stated therein.

Regular General Assembly Meeting. Notice of the annual regulargeneral assembly meeting shall be served by the Secretary, personally orhis duly authorized representative or by registered mail, upon each memberat his last known postal address, or by posting or publication, or throughother electronic means, at least 2 weeks before the said meeting. It shall beaccompanied with an agenda, minutes of meeting of the last generalassembly, consolidated reports of the Board of Directors and Committees,

audited financial statements, and other papers which may assist themembers to intelligently participate in the proceedings.

Special General Assembly Meeting. Notice of any special generalassembly meeting shall be served by the Secretary personally or his dulyauthorized representative or by registered mail upon each members whoare entitled to vote at his last known postal address, or by posting orpublication, or through other electronic means, at least one (1) week beforethe said meeting. It shall state the purpose and, except for related issues,no other business shall be considered during the meeting.

Section 20. Fiscal Year. The fiscal year of the cooperative shall

commence on the first day of January and end on the last day of December.

Section 21. Agenda. - As far as practicable, the order of business ofa regular general assembly meeting shall be:

a) Call to order;

b) Roll Call;

c) Proof of due notice;

d) Declaration of presence of quorum;

e) Consideration of the minutes of the previous meeting of thegeneral assembly;

f) Matters arising from the minutes;

g) Consideration of the consolidated report of the board ofdirectors, officers, and the committees, including audited financialstatements of the Cooperative;

h) Unfinished business;

i) Election of directors and committee members;

j) New business;

k) Other matters; and

l) Adjournment

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Section 22. Quorum for General Assembly Meeting. - Duringregular or special general assembly meeting, at least 25% of the totalnumber of members entitled to vote shall constitute a quorum.

Section 23. Voting System. - Only members entitled to vote shallbe qualified to participate and vote in any general assembly meeting. Amember is entitled to one vote only regardless of the number of shares heowned.

Election or removal of Directors and Committee members shall be bysecret ballot. Action on all matters shall be in any manner that will truly and

correctly reflect the will of the membership. No proxy and/or cumulativevoting shall be allowed.

ARTICLE IVBOARD OF DIRECTORS

Section 24. Composition of the Board of Directors. - Theconduct and management of the affairs of the Cooperative shall be vestedin the Board of Directors, which shall be composed ofSEVEN (7) members.

Section 25. Qualifications. - No member shall be elected as amember of the Board of Directors or any committee unless he is a memberentitled to vote and has the following qualifications:

a) a member in good standing; and

b) does not possess any of the disqualifications under this By-Laws.

Section 26. Disqualifications. - Any member who is under any ofthe following circumstances shall be disqualified to be elected as a memberof the Board of Directors or any committee, or to continue as such:

a) Holding any elective position in the government, except that ofto a party list representative being an officer of a cooperative heor she represents;

b) The members of the board of directors shall not hold any otherposition directly involved in the day-to-day operation andmanagement of the cooperative;

c) Having direct or indirect personal interest with the business ofthe Cooperative;

d) Having been absent for at least three (3) consecutive regular

meetings without reasonable cause;

e) Being an official or employee of the Cooperative DevelopmentAuthority;

f) Failure, or refusal without valid reason, to attend/undergo thetrainings required for the position as stipulated under the

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Philippine Cooperative Code of 2008 or its Implementing Rules andRegulations;

g) Having been convicted of any crime involving moral turpitude,gross negligence, or gross misconduct in the performance of theirduties or found culpable in any administrative case involving suchoffenses;

h) Having been disqualified by law; and

i) Any disqualification standard, which the general assembly, in aresolution, may adopt.

Section 27. Election of Directors. The members of the Board ofDirectors shall be elected by secret ballot by members entitled to voteduring the annual regular general assembly meeting. Unless earlierremoved for cause, or have resigned or become incapacitated, they shallhold office for a term of two (2) years or until their successors shall havebeen elected and qualified; Provided, that one-half plus one of the electeddirectors obtaining the highest number of votes during the first electionafter registration shall serve for two (2) years, and the remaining directorsfor one (1) year. Thereafter, all directors shall be elected for a term of two(2) years. The term of the incorporating directors shall expire upon theelection of their successors in the first regular general assembly after

registration.

Section 28. Officers. - The Board of Directors shall convene withinten (10) days after the regular general assembly meeting to elect by secretballot from among themselves the Chairman and the Vice-Chairman and toappoint the Secretary and Treasurer from outside of the Board. Theappointed officers shall serve during good behavior and shall not beremoved except for cause after due hearing.

A person shall be disqualified for appointment to any appointiveposition when:

a) he is related either by consanguinity or affinity up to thirdcivil degree to any person who is serving as appointive officer inthe cooperative; or

b) he is engaged in a business similar to that of thecooperative; or

c) he has, in any other manner, interests in conflict with thecooperative.

Section 29. Meeting of the Directors. - The regular meeting of theBoard of Directors shall be held at least once a month. However, the

Chairman or, in his absence, the Vice-Chairman, or majority of the directorsmay at any time call a special Board meeting to consider urgent matters.

The call shall be addressed and delivered to the Secretary stating the date,time and place of such meeting and the matters to be considered. Notice ofregular or special meetings of the Board of Directors, unless dispensed with,shall be served by the Secretary in writing to each director at least one (1)week before such meeting.

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Majority of the total number of directors constitutes a quorum totransact business. Any decision or action taken by the majority members ofthe Board of Directors in a meeting duly assembled shall be a valid

cooperative act.

Section 30. Vacancies. - Any vacancy occurring in the Board ofDirectors by reason of death, incapacity, removal or resignation may befilled by a majority vote of the remaining directors, if still constituting aquorum; otherwise, such vacancy shall be filled by the general assembly ina regular or special meeting called for the purpose. The elected directorshall serve only for the unexpired term of his predecessor in office.

In the event that the general assembly failed to muster a quorum tofill the positions vacated by directors whose term have expired and saiddirectors refuse to continue their functions on a hold-over capacity, the

remaining members of the Board together with the members of the AuditCommittee shall designate, from the qualified regular members of thegeneral assembly, their replacements who shall serve as such until theirsuccessors shall have been elected and qualified in a regular or specialgeneral assembly meeting called for the purpose.

If a vacancy occurs in any elective committee it shall be filled by theremaining members of the said committee, if still constituting a quorum,otherwise, the Board, in its discretion, may appoint or hold a special electionto fill such vacancy. The person so appointed/elected shall serve only for theunexpired portion of the term.

In the event that a vacancy in any of the appointive committeesoccurs, the board of directors shall appoint a person to fill the same:Provided, That the person so appointed shall serve only for the unexpiredportion of the term.

Section 31. Removal of Directors and Committee Members. -All complaints for the removal of any elected officer shall be filed with theboard of directors and such officer shall be given the opportunity to be

heard. Majority of the board of directors may place the officer concernedunder preventive suspension pending the resolution of the investigation.Upon finding of a prima facie evidence of guilt, the board shall present itsrecommendation for removal to the general assembly. An elective officermay be removed by three-fourths () votes of the regular members presentand constituting a quorum, in a regular or special general assembly meetingcalled for the purpose. The officer concerned shall be given the opportunityto be heard at said assembly.

An officer or member of an appointive committee appointed by theBoard of Directors may be removed from office for cause by a majority voteof all the members of the Board.

Section 32. Powers and Duties of the Board. - The board ofdirectors shall be responsible for the strategic planning, direction-settingand policy-formulating activities of the cooperative: Provided further, thatany member of the board shall not hold any other position directly involvedin the day-to-day operation and management of the cooperative.

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The Board of Directors, as a collegial body, shall perform the followingfunctions and responsibilities:

a) Provide general policy direction;

b) Formulate the strategic development plan;

c) Determine and prescribe the organizational and operationalstructure;

d) Review the annual plan and budget and recommend for theapproval of the general assembly;

e) Establish policies and procedures for the effective operation andensure proper implementation of such;

f) Evaluate the capability and qualification, and decide on theengagement of the services, of an external auditor;

g) Appoint the members of the mediation-conciliation and ethicscommittees and other officers as specified in the Code and its by-laws;

h) Decide election related cases involving the election committee orits members;

i) Act on the recommendation of the ethics committee on cases

involving violations of the Code of Cooperative Governance andEthical Standards; and

j) Perform such other functions as may be prescribed in the by-lawsor authorized by the general assembly.

ARTICLE VCOMMITTEES

A. Elective Committees

Section 33. Audit Committee. - An Audit Committee is hereby createdand shall be composed of THREE (3) members to be elected during a

general assembly meeting and shall hold office for a term of TWO (2)YEARS or until their successors shall have been elected and qualified.PROVIDED, THAT ON THE FIRST YEAR AFTER THE APPROVAL OFREGISTRATION OF AMENDMENT WITH THE COOPERATIVE DEVELOPMENTAUTHORITY, THE FIRST HIGHEST NUMBER OF VOTES SHALL SERVE FOR

THREE(3) YEARS, THE SECOND HIGHEST NUMBER OF VOTES SHALL SERVEFOR TWO(2) YEARS WHILE THE LOWEST NUMBER OF VOTES SHALL SERVEFOR ONE(1) YEAR. THEREAFTER, ALL SHALL SERVE FOR A PERIOD OF

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TWO(2) YEARS. Within ten (10) days after their election, they shall electfrom among themselves a Chairman, Vice-Chairman and a Secretary. Nomember of the committee shall hold any other position within the

Cooperative during his term of office.

The Committee shall:

a) Monitor the adequacy and effectiveness of the cooperativesmanagement and control system;

b) Audit the performance of the cooperative and its variousresponsibility centers;

c) Review continuously and periodically the books of accounts andother financial records to ensure that these are in accordance with

the cooperative principles and generally-accepted accountingprocedures;

d) Submit reports on the results of the internal audit and recommendnecessary changes on policies and other related matters onoperation to the board of directors and general assembly; and

Perform such other functions as may be prescribed in the by-laws orauthorized by the general assembly.

Section 33. Election Committee. - An Election Committee is

hereby created and shall be composed of _________3___________ members tobe elected during a general assembly meeting and shall hold office for aterm of _________________________ or until their successors shall have beenelected and qualified. Within ten (10) days after their election they shallelect from among themselves a Chairman, Vice-Chairman and a Secretary.No member of the committee shall hold any other position within theCooperative during his term of office.


a) formulate election rules and guidelines and recommend to thegeneral assembly for approval:

b) Implement election rules and guidelines duly approved by thegeneral assembly;

c) Recommend necessary amendments to the election rules andguidelines, in consultation with the board of directors, for thegeneral assemblys approval;

d) Supervise the conduct, manner and procedure of election andother election-related activities and act on the changes thereto;

e) Canvass and certify the results of the election;

f) Proclaim the winning candidates;

g) Decide election and other election-related cases, except thoseinvolving itself or its members; and

h) Perform such other functions as prescribed in the by-laws orauthorized by the general assembly.

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Election protests filed by the members of the Election Committeeshall be decided by the Board of Directors.

The decision of the Election Committee is appealable to theGeneral Assembly within fifteen (15) days from receipt thereof. The generalassembly shall decide the case within thirty (30) days after receipt of therecords of the case.

B. Appointive Committees

Section 35. Education and Training Committee. - An Education

and Training Committee is hereby created and shall be composed ofTHREE(3) members to be appointed by the Board of Directors and shall serve for aterm ofONE (1) YEAR, without prejudice to their reappointment. Except forthe Vice-Chairman, no member of the committee shall hold any otherposition within the Cooperative during his term of office.

The committee shall be responsible for the planning andimplementation of the information, educational and human resourcedevelopment programs of the Cooperative for its members, officers and thecommunities within its area of operation.

Section 36. Conciliation-Mediation Committee. - A Conciliation-

Mediation Committee is hereby created and shall be composed of THREE(3) members to be appointed by the Board of Directors. Within ten (10)days after their constitution, they shall elect from among themselves aChairman, Vice-Chairman and a Secretary who shall serve for a term ofTWO (2) YEARS or until successors shall have been appointed andqualified. No member of the Committee shall hold any other position in theCooperative during his term of office.

The Committee shall have the following powers and functions:

a) Formulate and develop the conciliation-mediation program andensure that it is properly implemented;

b) Monitor conciliation-mediation programs and processes;

c) Submit periodic reports of cooperative cases to the CooperativeDevelopment Authority as required by the latter;

d) Accept and file evaluation reports;

e) Submit recommendations for improvements to the board ofdirectors;

f) Recommend to the board of directors any member of thecooperative for conciliation-mediation training as conciliator-mediator;

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g) Issue the certificate of non-settlement (CNS); and

h) Perform such other functions as may be prescribed in the by-laws

or authorized by the general assembly.

Section 37. Ethics Committee. - An Ethics Committee is herebycreated and shall be composed ofTHREE (3) members to be appointed bythe Board of Directors. Within ten (10) days after their appointment, theyshall elect from among themselves a Chairman, Vice-Chairman and aSecretary who shall serve for a term ofTWO (2) YEARS or until successorsshall have been appointed and qualified. No member of the Committeeshall hold any other position in the Cooperative during his term of office.


a) Develop code of governance and ethical standards to beobserved by the members, officers and employees of thecooperative, subject to the approval of the board of directors andratification of the general assembly;

b) Disseminate, promote and implement the approved code ofgovernance and ethical standards;

c) Monitor compliance with the code of governance and ethicalstandards and recommend to the board of directors measures to

address the gap, if any;

d) Conduct initial investigation or inquiry upon receipt of acomplaint involving the code of governance and ethical standardsand submit report to the board of directors together with theappropriate sanctions;

e) Recommend ethical rules and policies to the board of directors; and

f) Perform such other functions as may be prescribed in the by-laws or authorized by the general assembly.

Section 38. Other Committees. - By a majority vote of all itsmembers, the Board of Directors may, by resolution, form a committee asmay be deemed necessary for the smooth operation of the Cooperative. Thesaid resolution shall also provide for the composition, term of office andfunctions and responsibilities of such committee.

ARTICLE VIOFFICERS OF THE COOPERATIVE

Section 39. Officers and their Duties. - The cooperative shallhave a Chairman, Vice-Chairman, Treasurer and a Secretary who shall serve

according to the functions of their respective offices as follows:

Chairman The Chairman shall:

a) Set the agenda for board meetings in coordination with the othermembers of the board of directors;

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b) Preside over all meetings of the board of directors and the generalassembly;

c) Sign contracts, agreements, certificates and other documents onbehalf of the cooperative as authorized by the board of directorsor by the general assembly;

d) Issue certificate of non-affiliation with any federation or union; and

e) Perform such other functions as may be authorized by the board ofdirectors or by the general assembly.

Vice-Chairman The Vice-Chairman shall:

a) Perform all duties and functions of the chairman in the absence

of the latter;

b) Act as ex-officio chairman of the education and trainingcommittee; and

c) Perform such other duties as may be delegated to him/her bythe board of directors.

Treasurer The Treasurer shall:

a) Ensure that all cash collections are deposited in accordance withthe policies set by the board of directors;

b) Have custody of all funds, securities and documentations relatingto all assets, liabilities, income and expenditures;

c) Monitor and review the financial management operations of theCooperative, subject to such limitations and control as may beprescribed by the board of directors;

d) Maintain full and complete records of cash transactions;

e) Maintain a petty cash fund and daily cash position report; and

f) Perform such other duties as may be prescribed in the by-laws orauthorized by the general assembly.

Secretary The Secretary shall:

a) Keep an updated and complete registry of all members;

b) Record, prepare and maintain records of all minutes ofmeetings of the board of directors and the general assembly;

c) Ensure that necessary board of directors actions and decisionsare transmitted to the management for compliance and

implementation;

d) Issue and certify the list of members who are in good standingand entitled to vote as determined by the board of directors;

e) Prepare and issue share certificates;

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f) Serve notice of all meetings called and certify the presence ofquorum of all meetings of the board of directors and the generalassembly;

g) Keep copy of the treasurers reports and other reports;

h) Keep and maintain the share and transfer book;

i) Serve as custodian of the cooperative seal; and

j) Perform such other functions as may be prescribed in the by-laws or authorized by the general assembly.

Section 40. Liabilities of Directors, Officers and CommitteeMembers. - Directors, officers and committee members, who willfully and

knowingly vote for or assent to patently unlawful acts, or who are guilty ofgross negligence or bad faith in directing the affairs of the Cooperative oracquire any personal or pecuniary interest in conflict with their duties asDirectors, officers or committee members shall be liable jointly andseverally for all damages resulting therefrom to the Cooperative, membersand other persons.

When a director, officer or committee member attempts to acquire, oracquires in violation of his duties, any interest or equity adverse to theCooperative in respect to any matter which has been reposed in him inconfidence, he shall, as a trustee for the Cooperative, be liable for damagesor loss of profits which otherwise would have accrued to the Cooperative.

Section 41. Management Staff. - The Board of Directors shall, byresolution, appoint the members of the Management Staff, fix theircompensation and tenure of office.

Section 42. The General Manager. - No person shall be appointedto the position of general manager unless he possesses the followingqualifications and none of the disqualifications herein enumerated:

a) He must be familiar with the business operation of theCooperative;

b) He must have at least two (2) years experience in the operationsof Cooperative or related business;

c) He must not be engaged directly or indirectly in any activitysimilar to the business of the Cooperative;

d) He must not have been convicted of any administrative, civil orcriminal case involving moral turpitude, gross negligence or gravemisconduct in the performance of his duties;

e) He must not be addicted to any form of gambling or immoral orvicious habits;

f) At the time of his appointment he must have no pendingadministrative, civil or criminal case involving financial and/orproperty accountabilities; and

g) He must be willing to undergo pre-service and/or in-servicetrainings.

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Section 43. Duties of the General Manager. As the chiefexecutive officer, the General Manager shall:

a) Oversee the overall day-to-day business operations of thecooperative by providing general direction, supervision,management and administrative control over all the operatingdepartments, subject to such limitations as may be set forth bythe board of directors or the general assembly;

b) Formulate and recommend in coordination with the operatingdepartments under his/her supervision, the cooperatives annualand medium term development plan, programs and projects, forapproval of the board of directors and ratification of the generalassembly;

c) Implement the duly approved plans and programs of thecooperative and any other directive or instruction of the board ofdirectors;

d) Provide and submit to the board of directors monthly reports onthe status of the cooperatives operation vis--vis its targets andrecommend appropriate policy or operational changes, ifnecessary;

e) Represent the cooperative in any agreement, contract, businessdealing, and in any other official business transaction as may beauthorized by the board of directors;

f) Ensure compliance with all administrative and other requirementsof regulatory agencies; and

g) Perform such other functions as may be prescribed in the by-lawsor authorized by the general assembly.

Section 44.Compensation. - Subject to the approval of the generalassembly, the members of the Board and Committees may, in addition toper diems for actual attendance to board and committee meetings, andreimbursement of actual and necessary expenses while performingfunctions in behalf of the cooperative, be given regular compensation;

Provided, further, thatthe directors and officers shall not be entitled to anyper diem when, in the preceding calendar year, the cooperative reported anet loss or had a dividend rate less than the official inflation rate for thesame year.

ARTICLE VIICAPITAL STRUCTURE

Section 45. Source of Funds. - The Cooperative may derive itsfunds from any or all of the following sources:

a) Members share capital contribution;

b) Revolving capital build-up which consist of the deferred paymentof patronage refund or interest on share capital;

c) Loans and borrowings including deposits;

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d) Subsidies, grants, legacies, aids, donation and such otherassistance from any local or foreign institution, public or private;

e) Retentions from the proceeds of services/goods procured bymembers; and

f) Other sources of funds as may be authorized by law.

Section 46. Continuous Capital Build-Up. - Every member shallhave invested in any or all of the following:

a) At least FIVE HUNDRED PESEO (P500.00) SEMI-ANNUALLY;

b) At least FIFTYpercent (50%) of his annual interest on capital andpatronage refund; and

c) Any other means as the general assembly may determine andadopt.

Section 47.Borrowing. - The Board of Directors, upon approval ofthe General Assembly, may borrow money from any source, local or foreign,under such terms and conditions that best serve the interest of theCooperative.

Section 48. Revolving Capital. - To strengthen the capital structureof the Cooperative, the general assembly may authorize the Board ofDirectors to raise a revolving capital by deferring the payment of patronage

refunds and interest on share capital, or such other schemes as may belegally adopted. To implement this provision, the Board of Directors shallissue a Revolving Capital Certificate with serial number, name, rate ofinterest, date of retirement and such other rights and privileges orrestrictions as may be deemed just and equitable.

Section 49. Retentions. - The general assembly may authorize theBoard of Directors to raise additional capital by deducting a certain percenton a per unit basis from the proceeds of services and/or goods procured bymembers.

Section 50. Share Capital Contribution. - Share Capital

Contribution refers to the unit of capital stated in the Common Sharesissued by the Cooperative in accordance with its Articles of Cooperation,subscribed and paid for by a member based on the subscription agreement.

Due and unpaid subscribed share capital shall be subject to a fine ofTWO PERCENT (2%) for every month of delinquency.

Section 51. Share Capital Certificate. - The Board of Directorsshall issue a Share Capital Certificate only to a member who has fully paidhis subscription. The Certificate shall be serially numbered and contain theshare holders name, the number of shares owned, the par value, and dulysigned by the Chairman and the Secretary, and bearing the official seal of

the cooperative. All certificates issued and/or shall be registered in thecooperatives Share and Transfer Book.

The shares may be purchased, owned or held only by persons whoare eligible for membership. Subject to existing government rules or laws,interests shall be paid only to paid-up shares, which may be in cash, orcredited as payment of unpaid subscriptions, outstanding accounts, oradditional shares or to the revolving fund of the cooperative.

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Section 52. Transfer of Shares. No member shall transfer hisshares or interest in the Cooperative or any part thereof unless:

a) He has held such share capital contribution or interest for not lessthan one (1) year;

b) The transfer is made to the Cooperative or to a member of thecooperative or to a person who falls within the field of membershipof the cooperative; and

c) The Board of Directors has approved such transfer.

The transfer of shares shall not be binding to the cooperative until

such transfer has been registered in the share and transfer book. Notransfer shall be completed until the old certificate have been endorsed andsurrendered to the Cooperative and a new certificate is issued in the nameof the member-transferee. If the last transferee, is not a member butqualified to be a member, he shall be required to pay the membership feeand a transfer fee ofTWO HUNDRED PESOS (P200.00).

In case of lost or destroyed share certificate, the Board of Directorsmay issue a replacement after the owner thereof executes a sworn affidavitin triplicate, setting forth the following:

a) Circumstances as to how, when and where said certificate was lost

or destroyed;

b) The serial number of the certificate; and the number of shares itrepresents; and

c) The lost or destroyed certificate has never been transferred, soldor endorsed to any third party; and that should the same be found,the owner shall surrender it to the cooperative. Any falserepresentation or statement made in the aforesaid affidavit shallbe a ground for expulsion from the cooperative.

ARTICLE VIIIOPERATIONS

Section 53. Business Undertakings and Use of Resources. The Cooperative shall engage in, and use its resources and/or facilities forthe primary purpose of the Cooperative.

No money of the Cooperative shall be paid out of its Treasury exceptin pursuance of an appropriation made in accordance with its plan andbudget approved by the general assembly.

Section 54. Management The management team, headed by the

General Manager, is primarily accountable to the board of directors. Itproposes the Cooperatives plan of activities by putting the Cooperativestargets in concrete terms and by formulating the basic strategies to achievethese targets for the consideration of the board of directors.

It is obligated to provide the board of directors with complete andadequate information on the operations and affairs of the Cooperative in atimely manner.

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Section 55. Policies and Procedures The board of directors shalldetermine appropriate and specific policies and procedures for the safe,

sound and transparent operations of the Cooperatives business.

The specific policies and procedures shall be contained in a Manual ofOperations which the Board of Directors shall prepare and periodicallyupdate to ensure that there is a readily available source of information withwhich to base any action or decision.

Section 56. Restrictions on Directors, Officers and CommitteeMembers. No director, officer or committee member shall avail of theservices, or transact business with the Cooperative under such terms andconditions or arrangements that are more favorable than those transactedby other members of the Cooperative, thereby giving undue advantage or

benefit to such director, officer, or committee member, to the detriment ofthe Cooperative and/or its members.

ARTICLE IXALLOCATION AND DISTRIBUTION OF NET SURPLUS

Section 57. Reserve Fund. At least ten percent (10%) of the netsurplus shall be allocated to Reserve Fund.

The Cooperative shall increase the allocation for Reserve Fund up tosixty-five percent (65%) of the net surplus in the succeeding years in theevent that the accumulated Reserve Fund as stated in the Statement ofCondition (Balance Sheet) of the Cooperative reflects a debit balance. Theincrease in allocation shall remain in the succeeding fiscal years until suchtime that the Reserve Fund attains a credit balance.

The administration of Reserve Fund shall be under the following rules:

a) The reserve fund shall be used for the stability of the Cooperativeand to meet net losses in its operations. The general assemblymay decrease the amount allocated to the reserve fund when ithas already exceeded the authorized share capital. Any sumrecovered on items previously charged to the reserve fund shall becredited to such fund.

b) The reserve fund shall not be utilized for investment, other thanthose allowed in the Philippine Cooperative Code of 2008. Suchsum of the reserve fund in excess of the authorized share capitalmay be used at any time for any project that would expand theoperations of the cooperative upon the resolution of the general

assembly.

c) Upon the dissolution of the cooperative, the reserve fund shall notbe distributed among the members. However, the generalassembly may resolve:

1) To establish usufructuary fund for the benefit of any federationor union to which the cooperative is affiliated; or

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2) To donate, contribute or otherwise dispose of the amount forthe benefit of the community where the cooperative operates.

If the member could not decide on the disposition of thereserve fund, the same shall be given to the federation orunion to which the cooperative is affiliated or operating withinthe cooperatives area of operation.

Section 58. Education and Training Fund. Not more than tenpercent (10%) percent shall be set aside for Education and Training Fund.

a) Half of the amount allocated to the education and training fundannually under this subsection may be spent by the cooperativefor education and training purposes; while the other half may beremitted to the cooperative education and training fund of the

federation or union chosen by the Cooperative or of which thecooperative is a member;

b) Upon the dissolution of the cooperative, the unexpendedbalance of the education and training fund pertaining to thecooperative shall be credited to the cooperative education andtraining fund of the chosen union or federation.

Section 59. Community Development Fund. - The Cooperativeshall set aside not less than three percent (3%) of its net surplus forcommunity development fund to be used for projects or activities that willbenefit the community where the Cooperative operates.

Section 60. Optional Fund. The Cooperative shall likewise setaside not more than seven percent (7%) of its net surplus for Optional Fundfor land and building fund, or any other fund.

Section 61. Interest on Share Capital and Patronage Refund. -The remaining net surplus shall be made available to the members in theform of interest on share capital not to exceed the normal rate of return oninvestment prescribed by law, and patronage refunds. The sum allocated forpatronage refund shall be made available at the same rate to all patrons ofthe cooperative in proportion to their individual patronage, subject to the

following rules:

a) The patronage refund of a member with fully paid share capitalshall be paid to him in cash or at his option be credited to hisaccount as additional share capital;

b) The patronage refund of a member with unpaid share capitalsubscription shall be credited to his account as payment of hisunpaid subscriptions until the same shall have been fully paid;

c) For non-member patrons, their proportionate patronagerefunds shall be set aside in a general fund created for the

purpose. Their individual patronage refund shall be credited totheir respective names only upon request and presentation ofevidence of the amount of his patronage. When the amount soaccumulated under his name within a period of two (2) yearsequals the minimum share capital contribution for membershipand if he is qualified and willing to comply with the requirementsfor membership, said non-member patron shall be consideredmember of the cooperative upon payment of membership fee.

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d) If within the period specified in the preceding paragraph, anynon-member patron who has accumulated the sum necessary for

membership, but refuses or fails to qualify for membership, theamount so accumulated in his account together with any part ofthe general fund for non-member patrons shall be credited to thereserve fund or to the education and training fund of thecooperative at the option of the general assembly.

ARTICLE XSETTLEMENT OF DISPUTES

Section 62. Resolution of Cooperative Disputes. - As far aspracticable, all intra-cooperative disputes shall be settled amicably within

the cooperative. The Conciliation-Mediation Committee shall formulate therules of procedures governing the conciliation-mediation mechanism of theCooperative. The said rules of procedure shall be in accordance with therules and regulations promulgated by the Cooperative DevelopmentAuthority.

Should the conciliation-mediation proceedings in the Cooperative fail,any of or both parties may file a complaint before the conciliation-mediationcommittee of the union or federation to which the Cooperative is affiliated.

If the conciliation-mediation proceedings in the union or federationstill fail, any of or both parties may file a complaint with the Cooperative

Development Authority for voluntary arbitration.

Section 63. Disputes Involving Members of the Conciliation-Mediation Committee. - If one of the parties to a controversy is a memberof the Conciliation-Mediation Committee, the chairman of the saidcommittee shall endorse the case to the Board of Directors who shallresolve the case following the procedures prescribed in the precedingsection.

If one or both parties are members of the Board of Directors and theConciliation-Mediation Committee, the Chairman of the Committee shallcommunicate in writing such fact to the Chairman of the Board of Directors

who shall forthwith call a special board meeting to form a five-man SpecialConciliation Committee, consisting of the heads of Audit and ElectionCommittees, the Secretary and one representative of each party. The specialcommittee shall convene immediately and after electing from amongthemselves the Chairman, Vice-Chairman and the Secretary, proceed toresolve the case in accordance with the rules of procedure of theCooperative. The committee shall automatically cease to exist upon the finalresolution of the controversy.

ARTICLE XIMISCELLANEOUS

Section 64. Investment of Capital. - The Cooperative may investits capital in any or all of the following:

a) Shares or debentures or securities of any other cooperative;

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b) Cooperative bank or any reputable bank in the locality;

c) Securities issued or guaranteed by Government; and/or

d) Estate primarily for the use of the Cooperative or its members;or

e) In any other manner approved by the general assembly.

Section 65. Accounting System. - The Cooperative shall keep,maintain and preserve all its books of accounts and other financial recordsin accordance with generally accepted accounting principles and practices,applied consistently from year to year, and subject to existing rules andlaws.

Section 66. External Audit. - At least once a year, the Board ofDirectors shall in consultation with the Audit Committee, cause the audit ofthe books of accounts of the Cooperative by an independent Certified PublicAccountant duly accredited by the Cooperative Development Authority andthe Board of Accountancy.

Section 67. Reports. - During the annual regular assembly meeting,the Cooperative shall submit a report of its operation, including committeereports, to the general assembly together with the audited financialstatements. The annual report shall be certified by the Chairman, Treasurer,Manager and other responsible officers of the Cooperative as true andcorrect in all aspects to the best of their knowledge. The audited financial

statements shall be certified by an independent Certified Public Accountant.Copy of the annual report, social audit reports, and audited financialstatements shall be submitted to the Cooperative Development Authoritywithin one hundred twenty days (120) days from the end of every calendaryear.

Section 68. Application of the Cooperative Code and ItsImplementing Rules and Regulations The provisions of the RepublicAct No. 9520 and its implementing rules and regulations shall havesuppletory application in matters not provided in this Code of By-Laws.

In the event that there is any provision in this Code of By-Laws that is

contrary to Republic Act No. 9520 and its implementing rules andregulations, the provision of Republic Act No. 9520 and its implementingrules and regulations shall apply. In such case, the Cooperative shall amendsuch provision to conform with the law and the implementing rules andregulations.

ARTICLE XIIAMENDMENTS

Section 69. Amendments. - Amendments to the Articles ofCooperation and this By-Laws may be adopted by at least two-thirds (2/3)votes of all members entitled to vote at any regular or special general

assembly called for the purpose without prejudice to the rights of dissentingmembers to withdraw their membership under the provisions of RepublicAct No. 9520.

Any amendment shall take effect upon approval by the CooperativeDevelopment Authority.

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Voted and adopted this 10TH day of March, 1994 in Carmen, Davao,Philippines.

First Amendment : Voted and adopted : March 18, 2011 at Divine MercyIslet, Carmen, Davao del Norte Philippines.

NAME AND SIGNATURE OF MEMBERS

PRINTED NAME SIGNATURE

1.(Sgd). Dominador A.Encarnacion

2. (Sgd).Naciansino F. Inso

3. (Sgd).Marcelino S. Perandos

4. (Sgd).Rolando S. Miedes

5. (Sgd).Nilo Buenacosa

6. (Sgd).Cristita H. Oducayen

7. (Sgd).Avelino B. Pulido

8. (Sgd).Elias D. Moises

9. (Sgd).Madelen C. Apostol

10. (Sgd).Modesta Cero

11. (Sgd).Gregorio Facula

12. (Sgd).Rolando Cabillar

13. (Sgd).Marilyn Fontanilla

14. (Sgd).Merlinda Lampara

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15. (Sgd).Nemesio Mamboyo

SIGNED IN THE PRESENCE OF:

(Sgd).Jocelyn C.Reambonanza

(Sgd).Leopoldo N. Garcia

Signature Over Printed Name Signature Over Printed Name

We, the undersigned, constituting a majority of the Board of Directorsof the CARMEN GOVERNMENT OFFICIALS AND EMPLOYEES MULTI-PURPOSE COOPERATIVE(CARGOE MPC) do hereby certify that theforegoing instrument is the Code of By-laws of the said Cooperative.

THE BOARD OF DIRECTORS

NAME POSITIONSIGNATURE

1. (Sgd).Dominador A. Encarnacion Jr. Chairman _____________________

2. (Sgd).Naciansino F. Inso Vice-Chairman_____________________

3. (Sgd).Marcelino S. Perandos Director_____________________

4. (Sgd).Rolando S. Miedes Director_____________________

5. (Sgd).Nilo Buenacosa Director_____________________

6. (Sgd).Cristita H. Oducayen Director_____________________

7. (Sgd).Avelino B. Pulido Director_____________________

8____________________________ ___________ _____________________

9____________________________ ___________ _____________________

10____________________________ ___________ _____________________

11____________________________ ___________ _____________________

12____________________________ ___________ _____________________

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13____________________________ ___________ _____________________

14____________________________ ___________ _____________________

15____________________________ ___________ _____________________

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Documents

Edited by-laws for Existing Coops