10 Questions
Which classification of cooperatives involves an association primarily composed of natural persons?
Primary
What is a necessary condition for a cooperative to be exempted from paying taxes on accumulated reserves and undivided net savings?
Not more than P10M
Which cooperative principle emphasizes the importance of providing education and training to its members?
Education, Training, and Independence
Which type of cooperative focuses on providing financial services to its members?
Credit
Under the Securities Regulation Code, how must securities issued by cooperatives be classified?
Non-speculative
Which privilege allows cooperatives preferential rights in the management of public markets?
Preferential rights in the management of public markets etc., terminals, and ports
What is the primary obligation when a cooperative is exempted from VAT for transactions with non-members?
Declare patronage refunds on 25% of the net income
Which feature guarantees that members' liability for cooperative debts is limited?
Limited Liability
Which classification of cooperatives can include entities operating with assets over P100M?
Large
Which principle focuses on the cooperative's concern for the broader community?
Concern for Community
Study Notes
Cooperative Definition
- A cooperative is 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.
Cooperative Principles
- 7 principles: Voluntary and Open Membership, Democratic Member Control, Member Economic Participation, Autonomy and Independence, Education, Training, and Independence, Cooperation among Members, and Concern for Community.
Cooperative Classification
- Classified according to Purpose (types): Multi-purpose, Credit, Consumers, Producers, Agriculture, Marketing, Agrarian Reform, Service, Transport, Water Service, Housing, Labor Service, Fishermen, Dairy Advocacy, Cooperative Bank, Workers, Health service, Electric, Mining, Education.
- Classified according to Membership (categories): Primary (natural), Secondary (federation), and Tertiary.
- Classified according to Assets: Large (more than P100M), Medium (P15-100M), Small (P3-15M), and Micro (P3M).
- Classified according to Areas of Operation (cooperative unions).
Features of Cooperatives
- Limited Liability.
- Preference of Claims as Creditor (Primary Lien upon the capital, deposits or interests of member).
- Securities issued shall not be "speculative" under Securities Regulation Code.
Tax Exemption Conditions
- Cooperatives must be listed in the CDA List furnished to BIR and LGUs and concerned agencies.
- Accumulated reserves and undivided net savings of not more than P10M.
Tax Exemption Exclusions
- Income Tax exemption does not apply to amount allocated for interest on capital.
- VAT exemption does not apply to transactions with non-members, and requires declaration of patronage refunds on 25% of the net income.
Fees Exemption
- Exemption from Register of Deeds for Loans less than P250k.
- Exemption from Court and Sheriff Fees.
- Exemption from Bond posting for courts.
Privileges of Cooperatives
- allowed to use sealed cash boxes in LGUs.
- Preferential right to supply.
- Preferential treatment in allocation of fertilizers, seeds, etc.
- Preferential rights in the management of public markets, terminals, and ports.
This quiz covers the basics of cooperative business laws and regulations. It includes questions on the definition and characteristics of cooperatives, as well as their social, economic, and cultural aspects.
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