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Memorandum Circular No. 2016-07
Series of 2016

TO : ALL CONCERNED
SUBJECT : AMENDED GUIDELINES GOVERNING THE ISSUANCE OF CERTIFICATE OF COMPLIANCE (COC)
Date : OCTOBER 18, 2016


Pursuant to the powers vested upon the Authority under RA 6939 (An Act Creating the Cooperative Development Authority…) and RA 9520 (The Philippine Code of 2008), the following Guidelines for the issuance of a Certificate of Compliance (COC) are hereby prescribed:

SECTION 1. TITLE

This Guidelines shall be known as the “Amended Guidelines Governing the Issuance of Certificate of Compliance (COC).”

SECTION 2. LEGAL BASES

Article 113 of RA 9520; Rule 8, Section 7of the Revised IRR, Section 13 (e) of Joint BIR –CDA Rules and Regulations and Section 13 of RA6939.

SECTION 3. SCOPE

This Guidelines covers all cooperatives registered with the Authority.

SECTION 4. OBJECTIVES

1. To prescribe the requirements for the issuance of Certificate of Compliance (COC);
2. To define the grounds for non-issuance or suspension of Certificate of Compliance (COC).

SECTION 5. DEFINITION OF TERMS

As used in this amended Guidelines, the following terms shall be construed to mean:

  1. Authority refers to the Cooperative Development Authority;
  2. Certificate of Compliance refers to the certificate, in lieu of the (then) Certificate of Good Standing, issued to all types of cooperatives after compliance with the rules of the Authority.
  3. Fiscal Year refers to the operating cycle of business operation and activities of a cooperative, covering a twelve (12) month period. Calendar year may be adopted as the fiscal period.
  4. Legitimate Purpose refers to any purpose that is not contrary to law, morals, and public policy.
  5. Preceding Fiscal Year refers to the fiscal year immediately preceding the date of issuance of a COC.

SECTION 6. PURPOSES OF A CERTIFICATE OF COMPLIANCE (COC)

A COC shall be issued once a year and can be used for any of the following purposes:

  1. To affirm the cooperative’s compliance with the Cooperative Annual Progress Report and its attachments as prescribed by RA 9520, its Revised IRR, and other related issuances;
  2. To secure a Certificate of Tax Exemption (CTE) and other incentives and privileges set forth in the CDA-BIR Joint Rules and Regulation ementing Articles 60 and 61 of RA 9520 in relation to RA 8424 (National Internal Revenue Code);
  3. To avail of local tax exemption privileges and secure permits and licenses prescribed under the provisions of the RA7160 (Local Government Code of 1991);
  4. To comply with the documentary requirements for accreditation as CDA training provider; and
  5. Such other legitimate purposes it may serve.

SECTION 7. REQUIREMENTS FOR ISSUANCE OF CERTIFICATE OF COMPLIANCE

The following are the requirements for the issuance of a COC:

7.1 For Micro Cooperatives

A. Cooperative Annual Progress Report (CAPR) which shall have the following attachments:

A.1 Financial Statements audited by any of the following:

1) External auditor accredited by the Board of Accountancy (BOA);
2) Audit Committee of the cooperative; or
3) Audit committee of the federation or union where the cooperative is affiliated,

A.2 List of Officers and Mandatory Trainings Undertaken/ Completed;

B. Certification fee of P100.00

Micro cooperatives, however, are required to encode their CAPR through the web based system within six (6) months from the issuance of the COC.

7.2 For Small, Medium and Large Cooperatives

A. Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachment:

a.1. Social Audit Report including its program of activities pursuant to its socio-civic goals;
a.2. Performance Audit Report, including copies of the semi annual Report on mediation and conciliation as received by the Authority pursuant to Rule 7 of the Revised IRR;
a.3. Financial Statements audited by an External Auditor accredited by the CDA; and
a.4 List of Officers and Mandatory Trainings Undertaken / Completed.

B. Certification fee of P100.00

7.3 For Secondary and Tertiary Cooperatives (Federations and Unions)

A. Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachments:

a.1 Social Audit Report including its program of activities pursuant to its socio-civic goals;
b.1 Performance Audit Report, including copies of the semi-annual Report on mediation and conciliation as received by the Authority pursuant to Rule 7 of the Revised IRR; ;
c.1 Financial Statements audited by External Auditor accredited by the CDA; and
d.1 List of Officers and Mandatory Trainings Undertaken / Completed.
e.1 List of affiliates and cooperatives which have remitted their respective Cooperative Education and Training Funds (CETF);
f.1 Business consultancy assistance including the nature, cost, and the use of CETF; and
g.1 Other training activities undertaken specifying therein the nature, participants, and cost of each activity.

B. Certification fee of P100.00

7.4 For CDA Registered Electric Cooperatives

A. Copy of the electronically encoded Cooperative Annual Progress Report (CAPR) with the following attachments:

a.1 Social Audit Report including its program of activities pursuant to its socio-civic goals;
b.1 Performance Audit Report, including copies of the semi-annual Report on mediation and conciliation as received by the Authority pursuant to Rule 7 of the Revised IRR; ;
c.1 Financial Statements audited by an External Auditor accredited by the CDA; and
d.1 List of Officers and Mandatory Trainings Undertaken / Completed.

B. List of Members issued with Share Capital Certificate.

C. Certification fee of P100.00

7.5 For Newly Registered Cooperatives

Upon registration, the COC shall be issued after payment of a Certification Fee of One Hundred Pesos (P100.00). Said COC shall be valid until April 30 of the immediately succeeding year.

Cooperatives with less than one (1) year of business operation from the date of registration shall be required to submit only the following:

a. Copy of the electronically encoded Cooperative Annual Progress Report (CAPR)
b. Financial Status Reports signed by the Audit Committee and the Chairman of the Cooperative:

• Statement of Financial Condition (Annex A)
• Statement of Operation (Annex B)

c. Certification fee of P100.00

SECTION 8. GROUNDS FOR NON-ISSUANCE OF A CERTIFICATE OF COMPLIANCE

Any of the following shall be a ground for the non-issuance of a COC:

  1. Non-submission of the required reports as mentioned in Section 7;
  2. Failure to encode the CAPR through the web-based CAPRIS and submit the printed form generated by the system, except for micro cooperatives; However, micro cooperatives that failed to electronically submit the immediately preceding year’s CAPR will not be issued a COC for the succeeding year.
  3. Willful failure to comply with the mandatory trainings for officers;
  4. Non-settlement of fines and/or penalty/ies for late or non-submission of mandatory reports except micro cooperatives;
  5. The cooperative is undergoing Dissolution proceedings.

SECTION 9. GROUNDS FOR SUSPENSION OR NON-RELEASE OF CERTIFICATE OF COMPLIANCE

Any of the following shall constitute a ground for suspension or non-release of a COC:

  1. The cooperative has two or more sets of Board of Directors claiming to be the legitimate officers of the cooperative and the dispute becomes the subject of a verified complaint filed with the Authority;
  2. The cooperative is complained of illegal activities and is subjected to an examination and/or investigation;
  3. The cooperative is issued with cease and desist order to refrain from business operation and/or undertaking business activities.
  4. The cooperative is found to have violated any of the provisions of MC No. 2015-11 and MC No. 2016-05 relating to the operation of Cooperative Branch and Satellite respectively.

SECTION 10. WAIVER OF COMPLIANCE WITH THE REQUIRED REPORTS

Cooperatives suffering from total destruction/loss of records and reports due to force majeure or fortuitous events shall be issued a COC only after compliance with the requirements set forth in Section 6 of MC No. 2015-04 dated August 18, 2015.

SECTION 11. SIGNING AUTHORITY AND JURISDICTION

The approving authority and jurisdiction in the issuance of COC shall be vested in the following: 

APPROVING AUTHORITY

 JURISDICTION

Extension Office Director COC of primary, secondary and tertiary cooperatives with principal address within the area of jurisdiction of the Extension Office concerned.
Chairman COC of newly registered selected types of cooperative (e.g. Labor Service Cooperative, Small Scale Mining Cooperative, etc.) registered with Central Office after the date of registration.

COC of Insurance Cooperatives, Coopbanks, Electric Cooperatives and tertiary cooperatives with national coverage.

SECTION 12. ISSUANCE OF COC AND RELEASE

The Authority shall forthwith issue the COC within thirty (30) days from receipt of the required reports. The Authority shall issue a claim stub (Annex C) to the applicant cooperative indicating the date of release of the Certificate of Compliance applied for.

SECTION 13. COVERAGE AND VALIDITY OF COC

The COC hereby issued shall cover the operations of the cooperative for the year immediately preceding the reporting period and shall be valid and effective until April 30 of the succeeding year.

SECTION 14. REPEALING CLAUSE

This Guidelines hereby repeals Memorandum Circular No. 2015-08 dated September 29, 2015 and other related issuances which are inconsistent herewith.

SECTION 15. DISSEMINATION

All Extension Offices of the Authority shall cause the information dissemination of this Guidelines.

SECTION 16. EFFECTIVITY

This Memorandum Circular shall take effect after fifteen (15) days following its publication in the Office of the National Administrative Register (ONAR) or Official Gazette.

Approved pursuant to Board Resolution No. 357, Series of 2016 dated October 18, 2016.


For the Board of Administrators:
By:

(SGD) ORLANDO R. RAVANERA
Chairman


RESOURCE:
pdf  MC 2016-07