Cooperative Management and Governance Quiz
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Cooperative Management and Governance Quiz

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Questions and Answers

What is required for the management of a cooperative?

  • A single manager
  • An external consultant
  • A committee of members
  • A Board of Directors (correct)

    • How long is the term for directors of a cooperative until their successors are qualified?

  • Three years
  • One year
  • Two years (correct)
  • Indefinitely

    • What is NOT allowed in a primary cooperative regarding voting?

  • Voting by proxy (correct)
  • Cumulative voting (correct)
  • Secret ballot voting
  • Voting by show of hands

    • Which body in a cooperative consists of not less than 5 but not more than 15 members?

    <p>Board of Directors</p> Signup and view all the answers

    Which of the following is NOT a qualification for members of the Board of Directors?

    <p>Having personal interest in the cooperative's business</p> Signup and view all the answers

    Which qualification is NOT necessary for becoming a member of the Board of Directors?

    <p>Graduate of any college degree</p> Signup and view all the answers

    What is the minimum frequency for regular meetings of the Board of Directors in a cooperative?

    <p>Once a month</p> Signup and view all the answers

    What does not need to be part of the notice for a Board of Directors meeting?

    <p>Minutes of the previous meeting</p> Signup and view all the answers

    What is the liability of a cooperative officer who denies a member access to examine records?

    <p>The officer is liable for damages to the member.</p> Signup and view all the answers

    Which of the following statements about the net surplus of a cooperative is false?

    <p>It shall be subject to income tax even for transactions with members only.</p> Signup and view all the answers

    What happens to the shares exceeding 20% of the share capital of an heir?

    <p>They revert to the cooperative upon payment to the heir.</p> Signup and view all the answers

    What minimum percentage of net surplus is allocated for the reserve fund?

    <p>20%</p> Signup and view all the answers

    Which distribution of net surplus is NOT permitted?

    <p>An amount for community development exceeding 10%</p> Signup and view all the answers

    Under what condition can a member transfer their shares or interest in the cooperative?

    <p>If the board of directors has approved the assignment.</p> Signup and view all the answers

    What is the maximum fixed par value for a share in a cooperative?

    <p>P1,000</p> Signup and view all the answers

    For what purpose can a member use the cooperative records after obtaining access?

    <p>For any legitimate purpose as long as it's in good faith.</p> Signup and view all the answers

    Cooperatives are not allowed to invest their capital in which of the following?

    <p>Shares of other cooperatives without approval.</p> Signup and view all the answers

    Which of the following is NOT a qualification for an auditor of a cooperative?

    <p>An active member of the cooperative.</p> Signup and view all the answers

    During what hours can a member examine the cooperative's books?

    <p>Only during reasonable hours on business days.</p> Signup and view all the answers

    What is the primary reason a cooperative cannot invest its capital in real estate?

    <p>It may distract from its main business activities.</p> Signup and view all the answers

    Which statement regarding the inheritance of cooperative shares is true?

    <p>An heir must qualify and be admitted as a member.</p> Signup and view all the answers

    Which item is not included in the Articles of Cooperation?

    <p>Membership</p> Signup and view all the answers

    Which of the following is unnecessary in the by-laws of a cooperative?

    <p>Term of existence</p> Signup and view all the answers

    What statement about application registration is incorrect?

    <p>Denial can be appealed to the Court of Appeals</p> Signup and view all the answers

    Who holds the highest policy-making authority within a cooperative?

    <p>General assembly</p> Signup and view all the answers

    Which power cannot be delegated by the general assembly?

    <p>Strategic planning and policy formulation</p> Signup and view all the answers

    What is true about the quorum requirement for the general assembly?

    <p>¾ vote of all its members must be present</p> Signup and view all the answers

    How can the general assembly's decisions be reinforced?

    <p>By constituting a quorum and remaining present</p> Signup and view all the answers

    What happens if the Office of the President fails to act on an appeal within 90 days?

    <p>The application is considered approved</p> Signup and view all the answers

    Which document is NOT required to be open for inspection by members of a cooperative?

    <p>Certificate of Membership of every member</p> Signup and view all the answers

    Which of the following statements about annual reports is true?

    <p>Every cooperative must draw up an annual report as of the end of every fiscal year.</p> Signup and view all the answers

    Which statement about tax exemptions for cooperatives is false?

    <p>All cooperatives are subject to national taxes regardless of membership.</p> Signup and view all the answers

    What is the tax status of cooperatives with accumulated reserves over P10 million?

    <p>They shall pay taxes at the full rate.</p> Signup and view all the answers

    Which of the following statements is incorrect regarding tax obligations of cooperatives?

    <p>Cooperatives with less than P10 million in reserves are indefinitely exempt.</p> Signup and view all the answers

    What criteria determines the tax treatment of cooperatives based on their membership dealings?

    <p>The amount of accumulated reserves and net savings.</p> Signup and view all the answers

    Which of the following does NOT need to be included in a cooperative's annual report?

    <p>The cooperative's bylaws.</p> Signup and view all the answers

    Which statement about cooperatives dealing with non-members is correct?

    <p>They can avoid taxes if their savings are below P10 million.</p> Signup and view all the answers

    Study Notes

    Articles of Cooperation and By-Laws

    • The Article of Cooperation must include the name of the cooperative, powers and capacities, and term of existence.
    • Membership details are not required in the Articles of Cooperation; they belong in the by-laws.
    • The term of existence in by-laws is not required.

    Cooperative Development Authority (CDA) Registration

    • Applications for registration by the CDA must be resolved within 60 days, or they are deemed approved.
    • Denials of registration can be appealed to the Office of the President, contrary to previous statements on appeal procedures.

    Governance and Structure

    • The highest policy-making body is the General Assembly, which cannot delegate strategic planning and policy formulation.
    • The General Assembly requires a quorum for decision-making, which is determined by a ¾ vote of members present.
    • A Board of Directors must consist of 5 to 15 members.
    • Directors need to be cooperative members in good standing with no delinquent accounts.

    Board Meeting Protocols

    • Regular meetings of the Board of Directors must occur at least once a month, not quarterly.
    • Majority constitutes a quorum for Board meetings; notice must be provided in writing.
    • Proxies are not allowed for Board member incapacity or term expiration situations.

    Member Rights and Audits

    • Members, representatives of the Cooperative Development Authority, can inspect the cooperative's records, excluding membership certificates.
    • Cooperatives must undergo annual audits by independent auditors who are accredited and recognized.

    Financial Management

    • Cooperatives are generally not subject to taxes on transactions with members only; exceptions apply for accumulated reserves over P10 million.
    • Surpluses must be distributed according to specified guidelines, which includes reserving a percentage for education and optional funds.

    Governance Violations

    • Members can review cooperative records, but misuse of this right for personal gain is prohibited.
    • Misunderstandings related to profit distributions should clarify that net surplus is not subject to income tax solely based on member transactions.

    Share Ownership and Transfer

    • Shares in cooperatives can be assigned only to members or those within the field of membership and must be held for at least one year before transfer.
    • The par value of a share cannot exceed P1,000.

    Investments and Limitations

    • Cooperatives cannot invest capital in shares or debentures of other cooperatives without member approval—restricting investments promotes funding for cooperative activities.

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    Description

    Test your knowledge on the management of cooperatives, including the roles and responsibilities of the Board of Directors and voting procedures. This quiz covers key concepts such as voting by proxy and cumulative voting in primary cooperatives.

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