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 by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of risks and benefits of the undertaking in accordance with the universally accepted cooperative principles. 

Organizing a cooperative can be complex and simple. It requires an understanding of the basic needs of the prospective cooperative members. It demands patience from the organizer who must make the cooperative's long-term goals and objectives, and its visions a real part of the members' lives.

But it can be too easy because the Cooperative Code of the Philippines (RA 6938) has devised very clear-cut steps for the cooperative organizer and members. The following are the basic information that the prospective members should understand before organizing a cooperative.

There are nine (9) steps suggested in setting up a cooperative.

FIRST.Get organized.You must have at least 15 members to do that. At once determine the common problems you would want solved and the basic needs you would want provided for through a cooperative. You may want to include increasing your production, marketing your produce, credit assistance, power generation, banking or insurance and other similar needs. Determining your problems and needs will also help you classify the kind of cooperative you will be organizing. Even before a cooperative is set up, a dedicated core group people who will do all the organizational and paper works is a must. From this core group, working communities may be formed to set things moving. These committees may include membership, finance, executive, secretariat to name a few.

SECOND. Reserved your proposed cooperative name. Secure and fill up Cooperative Name Reservation Request Form (CNRRF). This must be submitted to CDA Central Office or any of its Extension Office. A reservation fee shall apply. Please click Name Reservation button.

THIRD.Prepare a general statement called an economic survey. Economic Survey is a general statement describing, among others, the structure and purposes of the proposed cooperative. The structure and actual staffing pattern shall include a bookkeeper. This should indicate the area of operation, the size of membership and other pertinent data in a format provided by the Authority.

FOURTH. Prepare the cooperative's by-laws. The by-laws contain the rules and regulations governing the operation of the cooperative.

FIFTH. Prepare the articles of cooperation. Mandatory contents of the articles of cooperation are the following:

(a) the name of the cooperative, which must include the word "cooperative";

(b) the purpose or purposes and scope of business for which the cooperative is to be registered;

(c) the term of existence of cooperative;

(d) the area of operation and the postal address of its principal office;

(e) the names, nationality and the postal addresses of the registrants;

(f) the common bond of membership;

(g) The list of names of the directors who shall manage the cooperative; and

(h) The amount of its share capital, the names and residences of its contributors, and a statement of whether the cooperative is primary, secondary or tertiary. The articles of cooperation shall be signed by each of the organizers and acknowledged by them if natural persons, and by the chairpersons or secretaries, if juridical persons, before a notary public. .

SIXTH. Secure bond of accountable officer(s). A surety bond should be secured from a duly registered insurance or bonding company. Every director, officer and employee handling funds, securities or property on behalf of the cooperative shall be covered by this. The board of directors shall determine the adequacy of such bonds.

SEVENTH. Execute Treasurers Affidavit. A sworn statement of the treasurer elected by the subscribers showing that at least twenty-five per centum (25%) of the authorized share capital has been subscribed, and at least twenty-five per centum (25%) of the total subscription has been paid should be executed and to be attached to the articles of cooperation. The paid-up share capital shall not be less than Fifteen thousand pesos (P15,000.00)..

EIGHTH. Complete the Pre-Membership Education Seminar (PMES). A prospective member of a primary cooperative must have completed a Pre-Membership Education Seminar (PMES). You may contact the Regional or Extension Office which has jurisdiction over your proposed cooperative for technical assistance.

NINTH. Register your cooperative with the Cooperative Development Authority (CDA).. Submit the following required documents in four (4) copies:

Four (4) copies each of the Economic Survey, Articles of Cooperation and By-Laws duly notarized;

1. Economic Survey;

2. Articles of Cooperation and By-Laws;

3. Surety bond of acountable officers;

4. Treasurer's Affidavit;

5. Approved Cooperative Name Reservation Slip;

6. Certificate of PMES;

1. Onetime deduction of processing fee of one hundred pesos (Php100.00) shall be made through salary deduction. Loan amortization, in the form of salary deduction, shall commence on the succeeding payroll from the date the loan is released/granted.

2. Penalty of late payment of loan is 2% of the monthly amortization.

3. Pre-termination of loan or full payment of the loan before its maturity date may be allowed for all types of loan provided that any installment on the loan is not overdue and provided further that:

• In case of pre-termination, in which 50% of the original amount of loan has not been paid, a pre-termination fee of Php100.00 shall be charged to the remaining balance.

• In case of pre-termination, in which at least 50% of the original amount of loan has already been paid, no pre-termination fee shall be charged.

4. Pre-termination of loan from other financial institutions may be allowed provided that the borrower has to initially inform NTEMPC Treasurer before payment is made in any bank approved by the financial institution to avoid further deductions and over payment.

5. For members who are on maternity leave, automatic deduction of loan monthly amortization from maternity reimbursement is required.

6. One time re-structuring of loan terms and payments is allowed for every loan availed irregardless of the amount of the outstanding loan balance. Processing fee of Php100.00 will be charged through salary deduction for each re-structured loan.

7. Paid-up share capital of the borrower is automatically pledged to the cooperative upon release of the loan until full payment.

8. For members who are on maternity leave, prolonged leave of absence due to health reasons and those suspended members, extension of the payment period is allowed provided that interest should be paid first prior to such extension.

9. For suspended members who are serving six suspension days or more at the time of application, loan shall be approved only if loaned amount is equal to or less than his/her paid up capital. Otherwise, his/her loan application will be automatically denied and shall be processed upon his/her resumption of work.

10. In case the cooperative runs out of fund and the borrower has to wait until funds are available, all loan application documents (loan application form, pay slips) at the time of his/her application shall be deemed final.

11. For loan through other institution/enterprise – guidelines of the specific institution/enterprise shall apply. Member-borrower shall follow/be subject to the governing policies of the institution/enterprise on loan terms, interest rate (if applicable), etc.