Basic Difference and Co- op Principles and Practices
Download as PPT, PDF0 likes981 views
This document outlines the fundamental differences between cooperatives and other business models such as single proprietorships, partnerships, and corporations, focusing on aspects like formation, registration, management structure, liability, and taxation. It highlights cooperative principles including democratic member control, economic participation, autonomy, education, and community involvement, emphasizing their unique characteristics and practices that support sustainable development. Additionally, it details cooperative practices identified in Region 1, such as branch expansion, electronic transactions, and good governance.
Basic Difference and Co- op Principles and Practices
- 2. mphwang 021710 2 KO-OP BALITAAN IN PARTNERSHIP WITH TULONG BALITA ONLINE JAN.22, 2021
- 3. COOPERATIVE DEVELOPMENT AUTHORITY DAGUPAN EXTENSION OFFICE Basic Differences With Other Business Model Bases for Comparison SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE Number of persons required for formation Only one person At least two or more At least 5 persons are required to form a corporation. (natural and juridical persons can be stockholders at the same time) At least 15 natural persons are required to form a primary coop (3 primary coops are required to form a federation) Grant of Juridical Personality No separate juridical personality from owner but business name should be registered with the DTI Mere agreement of partners can be a partnership. However, it is better if registered under the SEC Must be registered with SEC Must be registered with CDA
- 4. COOPERATIVE DEVELOPMENT AUTHORITY DAGUPAN EXTENSION OFFICE Basic Differences With Other Business Model Bases for Comparison SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE Registration Requirements for Documentation Application Form Contract of Partnership Articles of Incorporation, By –laws and Bank Statement Articles of Cooperation, By-laws, Economic Survey, Bonds of Accountable Officers and Treasurer’s Affidavit Capitalization Contributions Only the owner contributes capital Partners contribute cash or services/industry Stockholders pay for the amount of shares he wants to buy A member can subscribe up to 10% of the total subscribed share capital
- 5. COOPERATIVE DEVELOPMENT AUTHORITY DAGUPAN EXTENSION OFFICE Basic Differences With Other Business Model Bases for Comparison SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE Management Structure Only one person decides Partners make a collective decision Board of Directors make final decision General Assembly has the final decision Voting No voting rights Votes proportional to the extent of interest of each partners Votes proportional to no. of stocks owned by stockholder; proxy voting allowed One member, one vote; no proxy voting in primary coops
- 6. COOPERATIVE DEVELOPMENT AUTHORITY DAGUPAN EXTENSION OFFICE Basic Differences With Other Business Model Bases for Comparison SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE Liability Owner assumes full liability All partners are equally liable except in limited partnerships Limited up to authorized capital Member’s liability is only up to his/her subscribed share capital Taxability Owner is liable for Income tax Partners pay tax on share as partner Profits taxable; stockholders pay tax on dividends received Co-ops which transact business with their members ONLY are tax exempt
- 7. COOPERATIVE DEVELOPMENT AUTHORITY DAGUPAN EXTENSION OFFICE Basic Differences With Other Business Model Bases for Comparison SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE Basis of Distribution of Surplus/Profit Owner enjoys all the profits All partners equally share in the profit or based on Partnership Agreement Stockholder’s share in the profit is dependent on the no. of stocks which he holds Member’s share in the surplus is based on his paid-up share capital and patronage refund or volume of business he/she contributed to the co-op Governing Principles Purely Business Management Principles Partnership Principles as stipulated by the partners Purely Business Management Principles Co-op Values & Principles and Business Management
- 9. COOPERATIVE PRINCIPLES • are systems or ideas that determine the essential characteristics of the cooperative and to distinguish them from other forms of organization and enterprise. These principles are universal. 9
- 10. COOPERATIVE PRINCILES • Are universal, applied by all cooperatives everywhere and invariable. 10
- 11. VOLUNTARY AND OPEN MEMBERSHIP • Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. 11
- 12. DEMOCRATIC MEMBER CONTROL Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote). 12
- 13. MEMBER ECONOMIC PARTICIPATION Members contribute equitably to, and democratically control the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, for setting-up reserves; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. 13
- 14. AUTONOMY AND INDEPENDENCE Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including the government, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy. 14
- 15. EDUCATION, TRAINING AND INFORMATION Cooperatives provide education and training for their members, elected officers, manager, and employees so they can contribute effectively to its development and growth. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of cooperation 15
- 16. 16 COOPERATION AMONG COOPERATIVES Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
- 17. 17 cooperatives work for the sustainable development of their communities through policies approved by their members. CONCERN FOR COMMUNITY
- 18. Cooperartive practices are the practical application of those principles as developed by cooperators in a given country , in accordance with their particular conditions and circumstances . They may vary from one country to another and from time to time. COOPERATIVE PRACTICES
- 19. 1. Capital Formation Capital structure highly influences the success and failure of cooperatives. Past failures proved that capital should really be contributed by the members. COOPERATIVE PRACTICES
- 20. 2. Cash Trading This is business done on cash and carry basis. The customer enjoys at least the use of the goods and services for the cash payment he/she gives.
- 21. 3. Selling Market Price Cooperatives offer goods and services at prevailing market prices. This promotes stability. It can cope with operational expenses and cover up the negative effect of shrinkage, depreciation, and losses.
- 22. 4. Constant Expansion Cooperatives are associations for the development and business of community services. As organizations, they have to grow for community services. Expansion is a must. It is done intensively and extensively.
- 23. 5. Quality Standardized Goods Cooperatives are intended to develop communities through the production of high-quality goods and provision of better services. Cooperatives could help by patronizing only standardized products and services of high quality.
- 24. 6. Cooperative wholesale or interlending (cooperative bank) Cooperatives can be organized with enough people and capital. They answer to the needs of the community. Needs arise when there are people. The expansion of membership may result in wholesale business. In fact, to be effective, wholesale business, interlending (cooperative bank) could be done by primary societies.
- 25. 7. Minimize Expenditures A significant factor favoring the growth of cooperatives is being a community project. Officers do not receive remuneration. If they get compensation, it is only in the form of allowances, per diems or honoraria. When audit shows the cooperative is not capable or afford the minimum wage, only employees get paid regularly.
- 26. COOPERATIVE PRACTICES IDENTIFIED IN REGION 1 mphwang 021710 26 1. Establishment of a branch/Satellite 2. Establishment of a Laboratory Co-op 3. Expansion of Area of Operation 4. In placed Communication and education Program 5. With Co-op Website to constantly update members 6. Electronic Transaction 7. Computerized loan processing, bookkeeping, and FS preparation
- 27. COOPERATIVE PRACTICES IDENTIFIED IN REGION 1 mphwang 021710 27 8. Board do not receive any compensation 9. Commitment to good governance 10. Conduct of Mid year GA/ Twice 11. Conduct of Mid Year assessment and year end assessment 12. Regular BOD Meetings (Twice)
- 28. COOPERATIVE PRACTICES IDENTIFIED IN REGION 1 mphwang 021710 28 18.Allocate allowance for Probalble Losses on Loans (With Credit Activty) 19.Aplication of CTE 20.Compliant in the submission of Mandatory Reports 21..Regular Monitoring fo DOSRI (Directors Officers and Related Interest) 22.Compute the Soundness of the operation of the cooperative
- 29. COOPERATIVE PRACTICES IDENTIFIED IN REGION 1 mphwang 021710 29 23. Linkage to other Networks (Fed/Unions/Apex Organizations) 24. Updated Records 25. Self Reliant (Continuous savings mobilization and capital build-up to avoid outside loans) 26. Regular Meetings 27. Plan and Budget 27. Involvement to community
- 30. THANKS FROM THE : Slideshares of: Sir Alexander Raquepo Dir. Josefina B. Bitonio mphwang 021710 30