Cooperative Insolvency and Dissolution Quiz

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Questions and Answers

What is the course of action for a cooperative that is unable to fulfill its obligations to creditors due to insolvency?

Apply for remedies under the Insolvency Law (correct)

Voluntarily dissolve without creditor approval

Seek assistance from the board of directors

File a lawsuit against the creditors

Under what circumstances can a cooperative be voluntarily dissolved without affecting the rights of any creditors?

By involving a court-appointed liquidator

By obtaining consent from all the creditors

By ceasing operations without any formal procedure

By a majority vote of the board of directors and a resolution adopted by at least three-fourths of all the members with voting rights (correct)

What is the requirement for giving notice of a meeting to discuss the dissolution of a cooperative?

Published in a newspaper for three consecutive weeks and sent to each member of record at least thirty days prior to the meeting (correct)

Sent to each member by email at least one week prior to the meeting

Announced verbally at a general assembly meeting

Published in a newspaper once and sent to each member at least two weeks prior to the meeting

What is required for the resolution authorizing the dissolution of a cooperative to be valid?

Certified by a majority of the board of directors and countersigned by the board secretary Signup and view all the answers

What is the main requirement for dissolving a cooperative without affecting creditors' rights?

Obtaining a resolution with three-fourths majority vote from all members with voting rights Signup and view all the answers

How can a cooperative proceed if it is unable to fulfill its obligations due to insolvency?

Apply for remedies under Act No. 1956, known as the Insolvency Law Signup and view all the answers

What is the minimum number of members with voting rights required to vote in favor of dissolution at a meeting?

At least three-fourths of all the members with voting rights Signup and view all the answers

How long should the order of purpose for dissolution be published before a hearing?

Not less than thirty (30) days Signup and view all the answers

In the case of involuntary dissolution, on what grounds can a cooperative be dissolved by order of a competent court?

Violation of any law, regulation, or provisions of its bylaws Signup and view all the answers

Under what circumstances can the Authority revoke the certificate of registration of a cooperative?

Having obtained its registration by fraud Signup and view all the answers

Who is responsible for verifying the petition for dissolution in cases where creditors are affected?

Board Secretary Signup and view all the answers

Where should a copy of the order for dissolution be posted for three consecutive weeks?

In three (3) public places in the municipality or city where the cooperative’s office is located Signup and view all the answers

What action should the Authority take upon expiry of the five (5) day notice to file objections?

Proceed to hear the petition and address any issues raised in objections filed Signup and view all the answers

What should be included in the order of dissolution issued by the Authority?

Claims and demands against it and details of dissolution resolution Signup and view all the answers

What does the Authority need to do before issuing an order for dissolution?

Fix a date for hearing which shall not be less than thirty (30) nor more than sixty (60) days after entry of order, publish it in a local newspaper and post a copy in two (2) public places Signup and view all the answers

Under what circumstances may a cooperative's registration be suspended or revoked by the Authority?

Having obtained its registration by fraud Signup and view all the answers

Study Notes

Insolvency and Dissolution of a Cooperative

If a cooperative is unable to fulfill its obligations to creditors due to insolvency, it may proceed to dissolve voluntarily or face involuntary dissolution by a competent court.

Voluntary Dissolution

A cooperative can be voluntarily dissolved without affecting the rights of any creditors if it is done in accordance with the law and the requirements for dissolution are met.
The main requirement for dissolving a cooperative without affecting creditors' rights is to ensure that all creditors are paid in full or their claims are secured.

Notice of Meeting

A notice of a meeting to discuss the dissolution of a cooperative must be given to all members with voting rights, stating the purpose of the meeting.

Resolution for Dissolution

The resolution authorizing the dissolution of a cooperative is valid if it is approved by at least two-thirds of the members with voting rights present at the meeting.

Involuntary Dissolution

A cooperative can be dissolved by order of a competent court if it is unable to fulfill its obligations due to insolvency, or if it is no longer operating in accordance with its purposes or the law.
The Authority may revoke the certificate of registration of a cooperative if it is no longer operating in accordance with its purposes or the law.

Verification of Petition

The Authority is responsible for verifying the petition for dissolution in cases where creditors are affected.

Publication of Order

A copy of the order for dissolution must be posted for three consecutive weeks in a public place, such as a local newspaper or the cooperative's office.

Authority's Action

Upon expiry of the five (5) day notice to file objections, the Authority should review the objections and make a decision on the dissolution of the cooperative.
The Authority should include the name of the cooperative, the reason for dissolution, and the date of dissolution in the order of dissolution issued.
Before issuing an order for dissolution, the Authority needs to verify that all creditors are paid in full or their claims are secured, and that the requirements for dissolution are met.

Suspension or Revocation of Registration

A cooperative's registration may be suspended or revoked by the Authority if it is no longer operating in accordance with its purposes or the law, or if it fails to comply with the requirements for registration.

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Description

Test your knowledge of insolvency and dissolution procedures for cooperatives. This quiz covers the application of remedies under Act No. 1956, voluntary dissolution when creditors are not affected, and related concepts.