The Cooperative Concept and Principles Lesson 1 Quiz

Cooperative Definition and Requirements

• A business enterprise can be called and operate as a cooperative if it has a primary requirement of a common bond of membership, and adheres to the universally accepted cooperative principles.
• The common bond of interest in a cooperative is the shared need or goal that unites members, such as a common occupation, geographic location, or economic need.

Membership and Capital Requirements

• The minimum capital requirement for individuals to become regular members of a cooperative is at least one share.
• Regular members have full voting rights and can participate in decision-making, whereas associate members do not have voting rights.

Education and Training

• The Pre-Membership Education Seminar (PMES) is a requirement for prospective cooperative members, aiming to educate them on the principles, values, and practices of cooperativism.

Capital Structure

• Cooperatives set up a maximum on buying shares to prevent any single member or group from dominating the cooperative.

Definitions and Principles

• According to RA 6938, a cooperative is a voluntary organization of individuals with a common goal or interest, formed to achieve economic, social, or cultural benefits.
• The International Cooperative Alliance defines cooperatives as autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations.
• According to the Cooperative Code of 2008 (RA 9520), a cooperative is a duly registered association of persons with a common bond of membership, operating on the principles of mutual aid, equality, equity, solidarity, and social responsibility.
• The universally accepted cooperative principles include: voluntary membership, democratic member control, limited return on equity, surplus belonging to members, education, cooperation among cooperatives, and concern for the community.