BY LAWS OF

DILASAG MUNICIPAL EMPLOYEES CREDIT COOPERATIVE

KNOWN ALL MEN BY THESE PRESENTS:
We, the undersigned Filipino citizen, of legal age, and residents of the Philippines, representing
at least majority of the members of the DILASAG MUNICIPAL EMPLOYEES CREDIT
COOPERATIVE, a primary CREDIT Cooperative, do hereby adopt the following code of By-laws.

Article l
Purpose/s and Goals

Section 1. Purpose/s and Goals. The Purpose/s and goals of this Cooperative are those set forth
in its Articles of Cooperation.

Article ll
Membership

Section 1. Membership. This Cooperative shall have a regular membership only.

A regular member is one who has complied with all the membership requirements and
entitled to all the rights and privileges of membership.

Section 2. Qualification for Membership. The membership of this Cooperative is

open to all natural persons, Filipino citizen, of legal age, with capacity to contract and, within
the common bond and field of membership described as follows:

Employees of Local Government Unit of Dilasag.

Section 3. Requirements for Membership.

A member must have complies with the following requirements:

a. Approved application for membership

b. Certificate of completion of the prescribed Pre-Membership Education Seminar (PMES)
c. Subscribed and paid the required minimum share capital and membership fee.

Section 4. Application for Membership. An Applicant for membership shall file a duly
accomplished form to the Board of Directors who shall act upon the application within thirty
(30) days from the date of filing. The Board of Directors shall devise a form for the purpose
which shall, aside from the personal data of the applicants, include the duties of a member to
participate in all programs including but not limited to capital build-up and savings mobilization
of the Cooperative and, such other information as may be deemed necessary.

The application form for membership shall include and undertaking to uphold the By-laws,
policies, guidelines, rules and regulations promulgated by the Board of Directors and the
general assembly. No application for membership shall be given due course if not accompanied
with a membership fee of two hundred pesos (Php 200), which shall be refunded to the
applicant in case of rejections.

Section 5. Appeal. An applicant whose application was denied by the Board of Directors may
appeal to the general assembly by giving notice to the Secretary of the Cooperative within
thirty (30) days before the next General Assembly meeting, whose decision on the matter shall
be final.

Section 6. Minimum Share Capital Requirement . An applicant for membership

shall subscribe at least four (4) shares with a total value of P 4000.00 of which, at least one
thousand (P 1,000.00) pesos corresponding to one (1) share shall be paid upon submission of
membership application.

However, no member shall own or hold more than Ten percent (10%) of the total
subscribed share capital of the Cooperative.

Section 7. Duties and Responsibilities of a Member . Every member shall have the
following duties:

a. Pay the installment of his share capital subscription as it falls due and to participate
in the capital build-up and savings mobilization activities of the cooperative;
b. Patronize the Cooperative’s businesses and services;
c. Participate in the membership education programs;
d. Attend and participate in the deliberation of all matters taken during general
assembly meetings;
e. Observe and obey all lawful orders, decisions, rules and regulations adopted by the
Board of Directors and the general assembly; and
f. Promote the purposes and goals of the Cooperative, the success of its business, the
welfare of its members and the cooperative movement in general.

Section 8. Rights and Privileges of Members . A member shall have the following
rights and privileges:

a. Attend during general membership meetings;

b. Avail himself of the services of the Cooperative, subject to certain conditions as may
be prescribed by the Board of Directors;
c. Inspect and examine the books of accounts, the minutes’ books, the share register,
and other records of the Cooperative during reasonable office hours;
d. Secure copies of cooperative records/documents pertaining to the account
information of the concerned member;
e. Has preference in the payment of interest on share capital and in the distribution of
the net assets of the Cooperative in case of liquidation; and
f. Such other rights and privileges as may be granted by the General Assembly.

Section 9. Member Entitled to Vote. Any regular member who meets the following
conditions is a member entitled to vote:

a. Paid the membership fee and the value of the minimum shares required for
membership;
b. Not delinquent in the payment if his share capital subscriptions and other accounts
or obligations;
c. Not violated any provision of this By-laws, the terms and conditions of the
subscription agreement; and the decisions, guidelines, rules and regulations
promulgated by the Board of Directors and the general assembly;
d. Completed the continuing education program prescribed by the Board of Directors;
and
e. Participated in the affairs of the Cooperative and patronized its businesses in
accordance with cooperative’s policies and guidelines.

Failure of the member to meet any of the above qualifications shall mean loss of right to vote
as declared by the board of directors
Section 10. Right of Member Entitled to Vote. A member entitled to vote shall have
the following rights.

a. Participate and vote on all matters deliberated upon during general assembly
meetings;
b. Seek any elective or appointive position, subject to the provisions of this By-laws and
the Philippine Cooperative Code of 2008.
c. Avail himself of the services of the Cooperative, subject to certain conditions as may
be prescribed by the Board of Directors;
d. Inspect and examine the books of accounts, the minutes books, the share register,
and other records of the Cooperative during reasonable office hours;
e. Participate in the continuing education and other training programs of the
cooperative; and
f. Such other rights and privileges as may be provided by the General Assembly.

Section 11. Liability of Members. A member shall be liable for the debts of the
Cooperative only to the extent of his subscribed share capital.

Section 12. Termination of Membership. Termination of membership may be automatic,

voluntary or involuntary, which shall have the effect of extinguishing all rights of a member in
the Cooperative, subject to refund of share capital contribution under Section 14 hereof.

a. Automatic Termination of Membership. The death, insanity,

permanent incapacity or judicial declaration by a competent court or the insolvency
of a member shall be considered an automatic termination of his membership in the
Cooperative.
b. Voluntary Termination. A member may, for any reason, withdraw his
membership from the cooperative by giving a sixty (60) day notice to the Board of
Directors. However, no member shall be allowed to withdraw or terminate his
membership during any period in which he has any pending obligation with the
Cooperative.
c. Involuntary Termination. A member maybe terminated by a vote of the
majority of all the members of the Board of Directors for any of the following
causes:
i. Has not patronized the services/businesses of the Cooperative as
provided for in the policies approved by the general assembly;
ii. Has continuously failed to comply with his obligations as provided for in
the policies approved by the general assembly;
iii. Has violated any provision of this By-laws and the policies promulgated
by the board of directors as approved by the general assembly; and
iv. For any act of omission injurious or prejudicial to the interest or the
welfare of the Cooperative.

Section 13. Manner of Involuntary Termination. The Board of Directors shall notify in
writing the member who is being considered for termination and shall give him the opportunity
to be heard.
The decision of the board of directors is appealed to the general assembly and the
procedure of which shall be in accordance with the las paragraph of Article 30 of RA 9520.

Section 14. Refund of Share Capital Contribution. A member whose membership

is terminated shall be entitled to a refund of his share capital contribution and all other interest
in the Cooperative. However, such refund shall not be made if upon payment the value of the
assets of the Cooperative would be less that the aggregate amount of its debts and liabilities
exclusive of his share capital contribution. In which case, the terminated member shall continue
to be entitled to the interest of his share capital contributions, patronage refund and the use of
the services of the Cooperative until such time that all his interests in the Cooperative shall
have

been duly paid. Upon the acceptance of his withdrawal or approval of his termination,
however, he loses his rights to attend, participate and vote in any meeting of the board of
Directors or the general assembly.

ARTICLE lll
Administration
Section 1. The General Assembly (GA). The general assembly is composed of all the
members entitled to vote, duly assembled and constituting a quorum and is the highest policy-
making body of the cooperative.

Section 2. Powers of the General Assembly . Subject to the pertinent provisions of

the Cooperative Code and the rules issued thereunder, the general assembly shall have the
following exclusive powers which cannot be delegated:
a. To determine and approve amendments to the cooperative Articles of Cooperation and
By- laws;
b. To elect or appoint the members of the board of directors, and to remove them for
cause;
c. To approve developmental plans of the cooperative; and
d. To delegate some of its power to a smaller body of the cooperative as authorized by the
Philippine Cooperative Code of 2008.
e. To take final authority on all matters vital affecting the cooperative.
f. To hear and pass upon the Board of Directors, Officers, Committees.

Section 3. Meetings. Meetings of the general assembly, board of directors and committees
may be regular or special. All proceedings and businesses undertaken at any meeting of the
general assembly or Board of Directors, if within the powers of authority of the Cooperative,
there being a quorum, shall be valid.

Section 4. Regular General Assembly Meeting . The General Assembly shall hold its
annual regular meeting at the principal office of the Cooperative or at any place within the
Philippines on the last Saturday of March of every year.

Section 5. Special General Assembly Meeting. The Board of Directors may, by a

majority vote of all its members, call a special general assembly meeting at any time to consider
urgent matters requiring immediate membership decision. The Board of Directors must likewise
call a special general assembly meeting within one (1) month from receipt of a written request
from a) at least ten percent (10%) of the total number of members entitled to vote; b) the Audit
Committee; or c) the Federation or Union to which the Cooperative is a member, or upon Order
of the Cooperative Development Authority.

Section 6. Notice of Meeting. All notices of meetings shall be in writing and shall include
the date, time, place, and agenda thereof stated therein.
a. Regular General Assembly Meeting. Notice of the annual regular general assembly
meeting shall be served by the Secretary, personally or his duly authorized
representative, by the registered mail, or by electronic means to all members of all
record at his last known postal address, or by posting or publication, or through other
electronic means, at least one (1) week before the said meeting. It shall be accompanied
with an agenda, minutes of meeting of the last general assembly meeting, consolidated
reports of the Board of Directors and Committees, audited financial statements, and
other papers which may assist the members to intelligently participate in the
proceedings.
 b. Special General Assembly Meeting. Notice of any special general assembly meeting shall
be served by the Secretary personally or his duly authorized representative, by
registered mail, or by electronic means upon each members who are entitled to vote at
his last known postal address, or by posting or publication, or through other electronic
means, at least one (1) week before the said meeting. It shall state the purpose and,
except for related issues, no other business shall be considered during the meeting.

Section 7. Order of Business. As far as practicable, the order of business of a

regular general assembly meeting shall be:
a. Call to order;
b. Roll Call;
c. Proof of due notice;
d. Declaration of presence of quorum;
e. Consideration of presence of quorum;
f. Reading and approval of the previous minutes of meeting;
g. Matters arising from the minutes;
h. Consideration of the consolidated report of the board of directors, officers, and the
committees, including audited financial statements of the Cooperative;
i. Unfinished business;
j. Election of directors and committee members;
k. Approval of Development Plan and Budget;
l. New business;
m. Other matters; and
n. Adjournment.

Section 8. Quorum for General Assembly Meeting. During regular or special

general assembly meeting, at least 51% of the total number of members entitled to vote shall
constitute a quorum.
Section 9. Voting System. Only members entitled to vote shall be qualified to participate and
vote in any general assembly meeting. A member is entitled to one vote only regardless of the
number of shares he owns.
Election or removal of Directors and Committee members shall be by secret ballot.
Action on all matters shall be in any manner that will truly and correctly reflect the will of the
membership. No Proxy and/or cumulative voting shall be allowed.

ARTICLE IV
Board of Directors

Section 1. Composition of the Board of Directors (BOD) . The Board of Directors

shall be composed of FIVE (5) Members.

Section 2. Functions and Responsibilities . The Board of Directors shall have the
following functions and responsibilities:

a. Provide general policy direction;

b. Formulate the strategic development plan;
c. Determine and prescribe the organization and operational structure
d. Review the Annual Plan and Budget and recommend for the approval of the GA;
 e. Establish policies and procedures for the effective operation and ensure proper
implementation of such;
f. Evaluate the capability and qualification and recommend to the GA the engagement
of the services of the External Auditor;
g. Appoint the members of the Mediation/conciliation and Ethics Committees and
order Officers as
h. specified in the Code and cooperative By-laws;
i. Declare the members entitled to vote;
j. Decide election related cases involving the Election Committee and its members;
k. Act on the recommendation of the Ethics Committee on cases involving violations of
Code of Governance and Ethical Standards; and
l. Perform such other functions as may be prescribed in the By-laws or authorized by
the GA;

Section 3. Qualifications. No member shall be elected or to continue as such member of

the Board of Directors unless he is a member entitled to vote and has the following
qualifications:

a. Has paid the minimum capital requirement

b. Have continuously patronized the cooperative services
c. A member in good standing for the last two years
d. Completed or willingness to complete the required education and training as may be
provided by laws, rules and regulations and policy approved by the general assembly
e. Of good moral character and other qualifications prescribed in the IRR of the
Authority

Section 4. Disqualifications. Any member who is under any of the following

circumstances shall be disqualified to be elected as a member of the Board of Directors or any
committee, or to continue as such:

a. Holding any elective position in the government, except that if a party list
representative or being and officer of a cooperative he or she represents;
b. Having served as director of the Cooperative for (3) consecutive terms;
c. The members of the board of directors shall not hold any other position directly
involved in the day-to-day operation and management of the cooperative;
d. Having direct or indirect personal interest with the business of the Cooperative;

e. Having been absent for in three (3) consecutive meetings or in more than fifty
percent (50%) of all meetings within the twelve (12) month period unless with valid
excuse as approved by the board of directors;
f. Being an official or employee of the Cooperative Development Authority;
g. Having been convicted in administrative proceedings or civil/criminal suits involving
financial and/or property accountability; and
h. Having been disqualified by law.

Section 5. Election of Directors. The members of the Board of Directors shall be elected
by secret ballot by members entitled to vote during the annual regular general assembly
meeting or special general assembly meeting called for the purpose. Unless earlier removed for
cause, or have resigned or become incapacitated, they shall hold office for a term of Six (6)
years or until their successor shall have been elected and qualified; Provide, that majority of the
elected directors obtaining the highest number of votes during the first election after
registration shall serve for two (2) years, and the remaining directors for one (1) year.
Thereafter, all directors shall serve for a term of two (2) years; provided, further, that no
director shall serve for more that (3) consecutive terms. The term of the cooperating directors
shall expire upon the election of their successors in the first regular general assembly after
registration.
Section 6. Election of Office within the Board. The board of Directors shall convene
within ten (10) days after the general assembly meeting to elect by secret ballot from among
themselves the Chairperson and the Vice-Chairperson, and to elect or appoint the Secretary
and Treasurer from outside of the Board.
For committees elected by the General Assembly and/or appointed by the BOD,
procedural process of electing the Chairperson, Vice-Chairperson or other positions among
themselves should be in accordance with the process mentioned above.

Section 7. Meeting of the Directors. The regular meeting of the Board of Directors
shall be held at least once a month. However, the Chairperson or majority of the directors may
at any time call a special Board meeting to consider urgent matters. The call shall be addressed
and delivered to the Secretary stating the date, time and place of such meeting and the matters
to be considered. Notice of regular and special meetings of the Board of Directors, unless
dispensed with, shall be served by the Secretary in writing to each director at least two (2) days
before such meeting.
Majority of the total number of directors constitutes a quorum to transact business. Any
decision or action taken by the majority embers of the Board of Directors in a meeting duly
assembled shall be a valid cooperative act.

Section 8. Vacancies. Any vacancy occurring in the Board of Directors by reason of death,
incapacity, removal or resignation may be filled up by a majority vote of the remaining
directors, it still constituting a quorum; otherwise such vacancy shall be filled by the general
assembly in a regular shall serve only for the unexpired term of his predecessor in the office.

In the event that the general assembly failed to muster a quorum to fill the positions
vacated by directors whose term have expired and said directors refuse to continue their
functions on a hold-over capacity, the remaining members of the Board together with the
members of the general assembly, their replacements who shall serve as such until their
successors shall have been elected and qualified in a regular or special general assembly
meeting called for the purpose.

If a vacancy occurs in any elective committee it shall be filled by the remaining members
of the said committee, if still constituting a quorum, otherwise, the Board, in its discretion, may
appoint or hold a special election to fill such vacancy.

Section 9. Removal of Directors and Committee Members. All complaints for the
removal of any elected officer shall be filed with the board of directors and such officer shall be
given the opportunity to be heard. Majority of the board of directors may place the officer
concerned under preventive suspension pending the resolution of the investigation. Upon
finding of a prima facie evidence of guilt, the board shall present its recommendation for
removal to the general assembly. An elective officer may be removed by three-fourths (3/4) of
the regular members present and constituting a quorum, in a regular or special general
assembly meeting called for the purpose. The officer concerned shall be given the opportunity
to be heard at said assembly.

In case where the officers sought to be removed consist of the majority of the BOD at
least 10% of the members with voting rights may file a petition with the CDA upon failure of the
BOD to call an assembly meeting to commence the proceeding for their removal. The decision
of the GA on the matter is final and executory.

An officer elected or appointed by the Board of Directors or any committee may be

removed from office for cause by a majority vote of all the members of the Board or Committee
as the case may be.
Section 10. Powers and Duties of the Board . The Board of directors shall be
responsible for the strategic planning, direction-setting and policy-formulating activities of the
cooperatives. Provided further that any members of the board shall not hold any other position
directly involved in the day-do-day operation and management of the cooperation.

ARTICLE V
Committee
Section 1. Audit Committee. An Audit Committee is hereby created and shall be
composed of three (3) members to be elected during a general assembly meeting and shall hold
office for a term of one (1) year until their successors shall have been elected and qualified.
Within ten (10) days after their election, they shall elect from among themselves a Chairperson,
Vice-Chairperson and a Secretary.

No member of the committee shall hold any other position within the Cooperative during his
term of office. The Committee shall provide internal audit service, maintain a complete record
of its examination and inventory, and submit an audited financial report quarterly or as may be
required by the Board and the general assembly.

The audit committee shall directly accountable and responsible to the General
Assembly. It shall have the power and duty to continuously monitor the adequacy and
effectiveness of the cooperative’s management control system and audit the performance of
the cooperative and its various responsibility centers.

Section 2. Functions and Responsibilities. The Audit Committee shall:

a. Monitor the adequacy and effectiveness of the cooperative’s management and control
system;
b. Audit the performance of the cooperative and its various responsibility Centers;
c. Review continuously and periodically the books of account and other financial records
to ensure that these are in accordance with the cooperative principles & generally
accepted accounting procedures;
d. Submit reports on the results of the internal audit and recommend necessary changes
on policies and other related matters on operation to the Board of Directors and GA;
e. Recommend or petition to the board of director’s conduct of special general assembly
when necessary; and
f. Perform such other functions as may be prescribed in the By-laws of authorize by the
GA.

Section 3. Election Committee. An Election Committee is hereby created and shall be

composed of three (3) members to be elected during a general assembly meeting and shall
holds office for a term of one (1) year or until their successors shall have been elected and
qualified. Within ten (10) days after their election they shall elect from among themselves a
Chairperson, Vice-Chairperson and a Secretary. No member of the committee shall hold any
other position within the Cooperative during his term of office.

Section 4. Functions and Responsibilities. The Election Committee shall:

a. Formulate election rules and guidelines and recommended to the GA for approval;
b. Implement election rules and guidelines duly approved by the GA;
 c. Recommended necessary amendments to the election rules and guidelines in
consultation with the Board of Directors, for approval of the GA;
d. Supervise the conduct, manner and procedure of election and other election related
activities and act on the changes thereto;
e. Canvass and certify the results of the election;
f. Proclaim the winning candidates;
g. Decide election and other related cases except those involving the Election Committee;
h. Perform such other functions as prescribed in the By-laws or authorized by the GA.

Section 5. Education and Training Committee. An education and Training

Committee is hereby created and shall be composed of three (3) members to be appointed by
the Board of Directors and shall serve for a term of one (1) year, without prejudice to their
appointment. Within ten (10) days after their election they shall elect from among themselves a
Chairperson, Vice-Chairperson and a Secretary. Except for the Vice-Chairperson, no member of
the committee shall hold any other position within the Cooperative during his term of office.

The committee shall be responsible for the planning and implementation of the
information, educational and human resource development programs of the Cooperative for its
members, officers and the communities within its area of operation.

Section 6. Functions and Responsibilities. The Education and Training Committee

shall:

a. Keep members, officers, staff well-informed regarding cooperative’s goals, objectives,

policies & procedures, services, etc.;
b. Plan and implement educational program for coop members, officers and staff;
c. Develop promotional and training materials for the cooperative; and
d. Conduct/Coordinate training activities.

Section 7. Mediation and Conciliation Committee. A Mediation and Conciliation

Committee is hereby created and shall be composed of three (3) members to be appointed by
the Board of Directors. Within ten (10) days after their appointment, they shall elect from
among themselves a Chairperson, Vice-Chairperson and a Secretary who shall serve for a term
of one (1) year or until successors shall have been elected and qualified. No member of the
Committee shall hold any other position in the Cooperative during his term of office.

Section 8. Functions and Responsibilities. The mediation and conciliation

Committee:

a. Formulate and develop the Conciliation-Mediation Program and ensure that it is

properly implemented;
b. Monitor Conciliation-Mediation program and processes;
c. Submit semi-annual reports of cooperative cases to the Authority within 15 days after
the end of every semester;
d. Accept and file Evaluation Reports;
e. Submit recommendations for improvements to the BOD;
f. Recommend to the BOD any member of the cooperative for Conciliation-Mediation
Training as Cooperative Mediator-Conciliator;
g. Issue the Certificate of Non-Settlement;
h. Perform such other functions as may be prescribed in the By-laws or authorized by the
GA.
Section 9. Ethics Committee. An Ethics Committee is hereby created and shall be
composed of three (3) members to be appointed by the Board of Directors. Within ten (10)
days after their appointment, they shall elect from among themselves a Chairman, Vice-
Chairman and a Secretary who shall serve for a term of one (1) year until successors shall have
been appointed and qualified. No member of the committee shall hold any other position in the
Cooperative during his term of office.

Section 10. Functions and Responsibilities. The Ethics Committee shall:

a. Development Code Governance and Ethical standards to be observed by the members,

officers and employees of the cooperative subject to the approval of the BOD and
ratification of the GA;
b. Disseminate, promote and implement the approved Code of Governance and ethical
Standards;
c. Monitor compliance with the Code of Governance and Ethical Standards and
recommend to the BOD measures to address the gap, if any;
d. Conduct initial investigation or inquiry upon receipt of a complaint involving Code of
Governance and Ethical Standards and submit report to the BOD together with the
appropriate sanctions;
e. Recommend ethical rules and policy to the BOD;
f. Perform such other functions as may be prescribed in the By-laws or authorized by the
GA.

Section 11. Other Committees. By a majority vote of all its members, the Board of
Directors may from such other committees as may be deemed necessary for the operation of
the Cooperative.

ARTICLE VI
Officers and Management Staff
of the Cooperative

Section 1. Officers and their Duties. The officers of the cooperative shall include the
members of the Board of Directors, different committees created by the general assembly,
general manager or chief executive officer, secretary, treasurer and members holding other
positions as may be provided for in this by-laws, shall serve according to the functions and
responsibilities of their respective offices as follows:

A. Chairperson – The Chairperson shall:

i. Set the agenda for board meetings in coordination with the other members of the BOD.

ii. Preside over all meetings of the Board of Directors and of the general assembly;
iii. Sign contracts, agreements, certificate and other documents on behalf of the
cooperative as authorized by the Board of Directors of by the GA;
iv. Issued Certificate of Non-Affiliation with the Federation or Union; and
v. Perform such other functions as may be authorized by the BOD or by the GA.
 B. Vice-Chairman – the Vice-chairperson shall:

i. Perform all the duties and responsibilities of the Chairperson in the absence of the
latter;
ii. Act as ex-officio chairperson of the Education and Training Committee; and
iii. Perform such other duties as may be delegated by the board of directors.

C. Treasurer – The Treasurer shall:

i. Ensure that all cash collections are deposited in accordance with the policies set by the
BOD;
ii. Have custody of all funds, securities and documentations relating to all assets, liabilities,
income and expenditures;

iii. Monitor and review the financial management operations of the cooperative, subject to
such limitations and control as may be prescribed by BOD;
iv. Maintain full and complete records of cash transactions;
v. Maintain a Petty Cash Fund and Daily Cash Position Report; and
vi. Perform such other functions as may be prescribed in this By-laws

D. Secretary – The Secretary shall:

i. Keep on updated and complete registry of all members Record, prepare and maintain
records of all minutes of all meetings of the BOD & the GA;
ii. Ensure that necessary BOD’s actions and decisions are transmitted to the management
for compliance and implementation;
iii. Issue and certify the list of members who are in good standing and entitled to vote as
determined by the BOD;
iv. Prepare and issue Share Certificates;
v. Serve notice of all meetings called and certify the presence of quorum of all meetings of
the BOD and GA;
vi. Keep copy of the Treasurer’s report & other reports;
vii. Keep and maintain the Share & Transfer Book;
viii. Serve as custodian of the cooperative seal; and
ix. Perform such other functions as may be prescribed in the By-laws or authorized by the
GA.

E. General Manager. The General Manager shall:

i. Oversee the overall day to day business operations of the cooperative by providing
general direction, supervision, management and administrative control over all the
operating departments subject to such limitations as may be set forth by the BOD of the
GA;
ii. Formulate and recommend in coordination with the operating departments under
his/her supervision, the Coops Annual and Medium Term Development. Plan, programs
and projects, for approval of the BOD, and ratification of GA;
iii. Implement the duly approved plans and programs of the cooperative and any other
directive or instruction of the BODs;
iv. Provide and submit to the BODs monthly reports on the status of the coop’s operation
vis-à-vis its target and recommend appropriate policy or operational changes, if
necessary;
v. Represent the cooperative in any agreement, contract, business dealings and in any
other official business transaction as may be authorized by the BODS;
 vi. Ensure compliance with all administrative and other requirements of regulatory bodies;
and
vii. Perform such other functions as may be prescribed in the By-laws or authorized by the
GA.

Section 2. Liabilities of Directors, Officers and Committee Members.

Directors, officers and committee members, who willfully and knowingly vote for or assent to
patently unlawful acts, or who are guilty of gross negligence or bad faith in directing the affairs
of the Cooperative or acquire any personal or pecuniary interest in conflict with their duties as
Directors, officers or committee members shall be liable jointly and severally for all damages
resulting there fro to the Cooperative, members and other persons.

When a director, officer or committee member attempts to acquire, or acquires in

violation of his duties, any interest or equity adverse to the Cooperative in respect to any
matter which has been reposed in him in confidence, he shall, as a trustee for the Cooperative,
be liable for damages or loss of profits which otherwise would have accrued to the Cooperative.

Section 3. Management Staff. The Board of Directors shall appoint, fix their
compensation and prescribed for the functions and responsibilities of the Management Staff
not provided hereof.

Section 4. Qualification of the General Manager . No person shall be appointed to

the position of general manager unless he/she possesses the following qualifications and none
of the disqualifications herein enumerated:

a. Must be familiar with the business operation of the Cooperative;

b. Must have at least two (2) years’ experience in the operations of Cooperative or
related business;
c. Must not be engaged directly or indirectly in any activity similar to the business
of the Cooperative;
d. Must not have been convicted of any administrative, civil or criminal cases
involving moral turpitude, gross negligence or grave misconduct in the
performance of his duties;
e. Must not be addicted to any form of gambling or immoral or vicious habits;
f. Must have no pending administrative, civil or criminal case involving financial
and/or property accountabilities at the time of his appointment; and
g. Must undergo pre-service and/or in-service trainings.

Section 5. Duties of the General Manager. The General Manager shall:

a. Over all in-charge of all the phases of the business operations of the
Cooperative, subject to the policies and guidelines set by the board of directors
and the general assembly.
b. Responsible in maintaining records and accounts of the Cooperative in such
manner that the true condition of its business may be ascertained there from at
any time.
c. Render reports monthly, annually or as may be required by the Board of
Directors or the general assembly, and preserve the books, documents,
correspondence and records of whatever nature concerning the operations of
the Cooperative which may come into his possession.
d. Subject to the policies set by the Board of Directors, employ, supervise and/or
dismiss any agent or employee in the management staff; and
 e. Perform such other duties as the Board of Directors may prescribe and turn over
to his successor all properties belonging to the Cooperative in his possession or
over which he has control upon the expiration/termination of his services.

Section 6. Duties of the Accountant. The Accountant of the Cooperative, who shall be
under supervision and control of the General Manager shall:

a. Install an adequate and effective accounting system within the Cooperative;

b. Render reports on the financial condition and operations of the Cooperative
monthly, annually or as may be required by the Board of Directors and/or the
general assembly;
c. Provide assistance to the Board of Directors in the preparation of annual budget;
d. Keep, maintain and preserve all books of accounts, documents, vouchers
contracts and other records concerning the business of the Cooperative and
make them available for auditing purposes to the Chairman of the Audit
Committee; and
e. Perform such other duties as the Board of Directors may require.

Section 7. Duties of the Bookkeeper. The Bookkeeper of the Cooperative who is under
supervision and control of the Accountant shall:

a. Records and update books of accounts;

b. Provide assistance in the preparation of reports on the financial condition and
operations of the Cooperative monthly, annually or as may be required by the Board
of Directors and/or the general assembly.
c. Keep, maintain and preserve all books of accounts, documents, vouchers, contracts
and other records concerning the business of the Cooperative and make them
available for auditing purposes to the Chairman of the Audit Committee; and
d. Perform such other duties as the Board of Directors may require.

Section 8. Qualifications of Accountant and Bookkeeper . No person shall be

appointed to the position of accountant and bookkeeper unless they possess the following
qualifications and none of the disqualifications herein enumerated:

i. Bachelor degree in accountancy must be required for Accountant, However Bookkeeper

must be knowledgeable in accounting and bookkeeping;
ii. Must have at least two (2) years’ experience in Cooperative or related business;
iii. Must not be engaged directly or indirectly in any activity similar to the business of the
Cooperative;
iv. Must not be convicted of any administrative, civil or criminal case involving moral
turpitude, gross negligence or grave misconduct in the performance of his duties;
v. Must not be addicted to any form of gambling or immoral or vicious habits;
vi. Must be willing to undergo pre-service and/or in-service trainings in accounting; and
vii. Must have no pending administrative, civil or criminal case involving financial and/or
property accountabilities at the time of his appointment.

Section 9. Compensation. Subject to the approval of the general assembly, the members of the
Board and Committee may, in addition to per diems for actual attendance to board and
committee meetings, and reimbursement of actual and necessary expenses while performing
functions in behalf of the cooperative be given regular compensation; Provided, further, that
the directors and officers shall be entitled to any per diem when, if in the preceding calendar
year, the cooperative reported a net loss or had a dividend rate less than the official inflation
rate for the same year.
 ARTICLE VII
Capital Structure

Section 1. Source of funds. The cooperative may derive its fund from any or all of the
following sources:

a. Members share capital contribution;

b. Loans and borrowings including deposits;
c. Revolving capital build-up which consist of the deferred payment of patronage refund or
interest on share capital;
d. Subsidies, grants, legacies, aids, donations and such other assistance from any local or
foreign institution, public or private;
e. Retentions from the proceeds of services acquired/goods procured by members; and
f. Other sources of funds as may be authorized by law.

Section 2. Continuous Capital Build-up. Every member shall have invested in any or
all of the following:

a. At least one percent (1%) of his monthly income;

b. At least fifty percent (50%) of his annual interest on capital and patronage refund; and
c. At least three percent (3%) of each good procured/service acquired from the
cooperative.

Section 3. Borrowing. The Board of Directors, upon approval of the General Assembly, may
borrow funds from any source, local or foreign, under such terms and conditions that best
serve the interest of the Cooperative.

Section 4. Revolving Capital. To strengthen the capital structure of the Cooperative, the
general assembly may authorize the Board of Directors to raise a revolving capital by deferring
the payment of patronage refunds and interest on share capital, or such other schemes as may
be legally adopted. To implement this provision, the Board of Directors shall issue a Revolving
Capital Certificate with serial number, name, rate of interest, date of retirement and such other
privileges or restrictions as may be deemed just and equitable.

Section 5. Retentions. The general assembly may authorize the Board of Directors to raise
additional capital by deducting a certain percent on a per unit basis from the proceeds of
services acquired and/or goods procured by members.

Section 6. Share Capital Contribution. Share Capital Contribution refers to the value
of capital subscribed and paid for by a member in accordance with its Articles of Cooperative.

Section 7. Share Capital Certificate. The Board of Directors shall issue a Share Capital
Certificate only to a member who has fully paid his subscription. The Certificate shall be serially
numbered and contain the share holder’s name, the number of shares owned, the par value,
and duly signed by the Chairman and the Secretary, and bearing the official seal of the
cooperative. All certificates issued and/or transferred shall be registered in cooperative’s Share
and Transfer Book.

The shares may be purchased, owned or held only by persons who are eligible for
membership. Subject to existing government rules or laws, interests shall be paid only to paid-
up shares which may be in cash; or credited as payment of unpaid subscriptions, outstanding
accounts, or additional shares or to the revolving fund of the cooperative.
Section 8. Transfer of Shares. The cooperative shall have the first option to buy any share
offered for sale. The amount to be paid for such shares shall be the par value of the book value,
whichever is lower.

a. He has held such shares or interest for not less than one (1) year;
b. The transfer is made to a member of the cooperative or to a person who falls within the
field of membership of the cooperative, and that said person is acceptable to the
cooperative; and
c. The Board has approved such transfer.
The transfer of shares shall not be binding to the cooperative until such transfer has been
registered in the share and transfer book. No transfer shall be completed until the old
certificate have been endorsed and surrendered to the Cooperative and a new certificate is
issued in the name of the member-transferee. The corresponding transfer fee shall be
collected from the transferee as prescribed in the cooperative policy.

In case of lost of destroyed share certificate, the Board of Directors may issue a
replacement after the owner hereof executes a sworn affidavit, setting forth the following:

a. Circumstances as to how, when and where said certificate was lost or destroyed
b. The serial number of the certificate, and the number of shares it represents;
c. The lost or destroyed certificate has never been transferred, sold or endorsed to any
third party, that should the same be found, the owner shall surrender it to the
cooperative; and
d. That any false representation or statement made in the aforesaid affidavit shall be a
ground for expulsion from the cooperative.

ARTICLE VIII
Operations

Section 1. Primary Consideration. Adhering to the principle of service over and above
profit, The cooperative shall endeavor to:

a. Engage in lending Services among its members.

b. Formulate and implement program strategies that will provided its members and the
communities within its area of operation needed goods/services;
c. Formulate and implement studies and/or programs that will address the needs of
members

ARTICLE IX
Allocation and Distribution of Net Surplus

Section 1. Allocation – At the end of its fiscal year, the Cooperative shall allocate and
distribute its net surplus as follows:

a. Reserve Fund. At least ten percent (10%) shall be set aside for Reserve Fund subject
to the following rules, provided, that in the first five (5) years of operation after
registration, this amount shall not be less that fifty per centum (50%) of the net plus:

i. The reserve fund shall be used for the stability of the Cooperative and to
meet net losses in its operations. The general assembly may decrease the
amount allocated to the reserve fund when it has already exceeded the
authorized share capital. Any sum recovered on items previously charged to
the reserve fund shall be credited to such fund.
 ii. The reserve fund shall not be utilized for investment, other than those
allowed in the Cooperative Code. Such sum of the reserve fund in excess of
the authorized share capital may be used at any time for any project that
would expand the operations of the cooperative upon the resolution of the
general assembly.
iii. Upon the dissolution of the cooperative, the reserve fund shall not be
distributed among the members. However, the general assembly may
resolve:

a. To establish unsufructuary fund for the benefit of any federation or union to

which the cooperative is affiliated; or
b. To donate, contribute or otherwise dispose of the amount for the benefit of
the community where the cooperative operates. If the member could not
decide on the disposition of the reserve fund, the same shall be given to the
federation or union to which the cooperative is affiliated.

b. Education and Training Fund. Not more than ten percent (10%) shall be
set aside for Education and Training Fund.

i. Half of the amount allocated to the education and training fund annually under this
subsection may be spent by the cooperative for education and training purposes; while
the other half may be remitted to a union or federation chosen by the cooperative or of
which it is a member.

ii. Upon the dissolution of the cooperative, the unexpended balance of the education and
training fund pertaining to the cooperative shall be credited to the cooperative
education and training fund of the chosen union or federation.

c. Community Development Fund. At least three percent (3%) shall be

used for projects and activities that will benefit the community where the
cooperative operates.

d. Optional Fund. Not more than seven percent (7%) shall be set aside for
Optional Fund for land and building, and any other necessary fund.

Section 2. Interest on Share Capital and Patronage Refund. The remaining net
surplus shall be made available to the members in the form of interest on share capital not to
exceed the normal rate of return on investment and patronage refunds. Provided, that any
amount remaining after the allowable interest and the patronage refund have been deducted
shall be credited to the reserved fund. The sum allocated for patronage refund shall be made
available at the same rate to all patrons of the cooperative in proportion to their individual
patronage, provided that:

A. In the case of member patron with paid-up share capital contribution, his/her
proportionate amount of patronage refund shall be paid to him unless he/she agrees to
credit the amount to his/her account as additional share capital contribution;
B. In the case of member patron with unpaid share capital contribution, his/her
proportionate amount of patronage refund shall be credited to his/her account until the
share capital has been fully paid;
C. In the case of non-member patron, his/her proportionate amount of patronage refunds
shall be set aside in a general fund for such patron and shall be allocated to individual
non-member patron and only upon request and presentation of evidence of the amount
of his/her patronage. The amount to allocated shall be credited to such patron toward
payment of the minimum capital contribution for membership. When a sum equal to
this amount has accumulated at any time within two (2) cooperative if he so agrees or
 request and complies with the provisions of the by laws for admission to membership;
and
D. If within the period specified hereof, any subscribed who has not fully paid his
subscribed share capital or any non-member patron who has accumulated, the sum
necessary for membership, but who does not request

nor agree to become a member of fails to comply with the provisions of this bylaws for
admission to membership, the amount so accumulated or credited to their account
together with any part of the general fund for non-member patron shall be credited to
the reserve fund or to the education and training fund of the cooperative, at the option
of the cooperative.

ARTICLE X
Settlement of Disputes

Section 1. Mediation and Conciliation. All inter and intra-cooperative disputes shall
be settled within the cooperative in accordance with the pertinent Guidelines issued by the
Cooperative Development Authority.

Section 2. Disputes
Involving Members of the Mediation and Conciliation
Committee and Board of Directors. If one of the parties to a controversy is a
member of the Mediation and Conciliation Committee, the Chairman shall endorse the case to
the Board of Directors who shall resolve the case following the procedures prescribed in the
proceeding section. If one or both parties are members of the Board of Directors and the
Mediation and Conciliation Committee, the Chairman of the Committee shall communicate in
writing such fact to the Chairman of the Board of Directors who shall forthwith call a special
board meeting to form a five (5)-man Special Conciliation Committee, consisting of the heads of
Audit and Election Committees, the Secretary and one representative of each party. The special
conciliation committee shall convene immediately and after electing from among themselves
the Chairman, Vice-Chairman and the Secretary, proceed to resolve the case in accordance with
the procedures prescribed in the preceding section. The committee shall automatically cease to
exist upon the final resolution of the controversy.

Article Xl
Miscellaneous

Section 1. Investment of Capital. The Cooperative may invest its capital in any or all of
the following.
a. Shares or debentures or securities of any other cooperative;
b. Any reputable bank in the locality or any cooperative and cooperative banks;
c. Securities issued or guaranteed by Government;
d. Real State primarily for the use of the Cooperative or its members; or
e. In any other manner approved by the general assembly.

Section 2. Accounting System. The Cooperative shall keep, maintain and preserve all its
books of accounts and other financial records in accordance with generally accepted accounting
principles and practices, applied consistently from year to year, and subject to existing laws,
rules and regulations.

Section 3. External Audit. At least once a year, the Board of Directors shall in consultation
with the Audit Committee, cause the audit of the books of accounts of the Cooperative by CDA
accredited independent Certified Public Accountant.
Section 4. Annual Report. During the annual regular assembly meeting, the Cooperative
shall submit a report of its operation to the general assembly together with the audited
financial statements. The Annual report shall be certified by the Chairperson and Manager of
the Cooperative as true and correct in all aspects to the best of their knowledge. The audited
financial statement shall be certified by CDA accredited independent Certified Public
Accountant.

The Cooperative shall submit the following reports to the Authority within (120) days
from the end of every calendar year.

a. Cooperative Annual Performance Report (CARP);

b. Social Audit Report;
c. Performance Report;
d. Audited Financial Statement duly stamped “Received” by BIR;
e. List of officers and training undertaken/completed.

ARTICLE XII
Amendments

Section 1. Amendments of Articles of Cooperative and By-laws.

Amendments to the Articles of Cooperative and this By-Laws may be adopted by at least two
thirds (2/3) votes of all members with voting rights without prejudice to the rights of dissenting
members to withdraw their membership under the provisions of the Philippine Cooperative
Code of 2008.

The amendment/s shall take effect upon approval by the Cooperative Development
Authority.

Voted and adopted this 5th day of August 2022 in Dilasag, Aurora Philippines

NAMES SIGNATURES

1. JONATHAN N. TUD _________________________

2. ELIZABETH A. PASCUAL _________________________

3. RUBEN B. AQUINO _________________________

4. BLADIMIR M. BILLEDO _________________________

5. JENIFER C. NATIVIDAD _________________________

6. CARLITO G. GABRIEL, JR. _________________________

7. VIRGILIA Y. RIŇON _________________________

8. LEONILA S. DIZO _________________________

9. RANDY DC. ALFONSO _________________________

10. LERMA G. APIGO _________________________

11. DELFIN T. ABANDO _________________________

12. AQUILINO P. VALDEZ _________________________

13. VILLAMOR LIGAS _________________________

14. RITCHIE P. DANG-IT _________________________

15. LAGRITA P. BARTOLOME _________________________

16. JOY A. ESPREGANTE _________________________

17. RIZZA C. SABUGO _________________________

18. MELITA A. BRIONES __________________________

19. BUENAVENTURA A. GALINDO __________________________

20. MONINA B. DISMAYA __________________________

21. JANE V. FELIX __________________________

22. MARYVIC E. DE GRACIA __________________________

23. MARILYN C. BERNABE __________________________

24. GLORIA S. ANCHETA ___________________________

25. SHIRLEY M. MERCADO ___________________________

26. ALONA T. AGUSTIN ___________________________

27. MARILYN P. AQUINO ___________________________

28. SHARON Z. TRUCILLA ___________________________

29. KEEN DAYSON A. PASCUA ___________________________

30. VERSELY B. RAMAC ___________________________

31. MARCELINA B. CALIGAN ___________________________

32. MARILYN B. FRONDA ___________________________

33. JOCELYN LAPADA ___________________________

34. LORILIE D. NOVENO ___________________________

35. JADE N. TRUCILLA ___________________________

36. MERCY S. RANAN ___________________________

37. ROMNER A. AGUSTIN ___________________________

38. ALLAN M. SUBIA ___________________________

39. RUBY LAURENCIO ___________________________

40. MYRNA C. DONATO ___________________________

41. FRANCISCO C. ALONZO ___________________________

42. MARK ANTHONY VALENZUELA ___________________________

43. JHONARD SANCHEZ ___________________________

44. MARICEL SUMINEG ___________________________

45. TEODELYN C. LAMBINICIO ___________________________

46. LORENZO T. ACACIO ___________________________

47. LEA L. GOROSPE ___________________________

48. FEDERICO DG. SANTOS ____________________________

49. ELCARSON N. PASCION ____________________________

50. MYVELYN B. FLORES ____________________________

51. JESSAMIN T. LLAVE ____________________________

52. DAREN V. PORTIN ____________________________

53. ROLLY MAR Y. CAILER ____________________________

54. YORICKSON S. RANAN ____________________________

55. ELEONOR D. GATULLA ___________________________

56. RENATO LAGTO ____________________________

57. ALMA V. SALVA ____________________________

58. ROCEL V. DE MAYO ____________________________

59. EVANGELINE V. TAGUINES ____________________________

60. MARILOU R. VALDEZ ____________________________

61. MARILYN B. GATCHALIAN ____________________________

62. IRENE S. NICER ____________________________

63. FLOCERFIDA FUERTE ____________________________

64. HAZELLE A. MOISES ____________________________

65. ANNIE VI A. RANAN ____________________________

66. JOMARK P. ROBLES ____________________________

67. CARL JOHN Y. LIGAS ____________________________

68. REYNALDO C. GROSPE ____________________________

69. EDUARDO BALAWEG ____________________________

70. ROSEMARIE C. DARAO ____________________________

71. MA. THERESA T. EMBISAN ____________________________

72. REMEDIOS P. DACUSCUS ____________________________

73. EMMANUEL G. BERNABE ___________________________

74. SUNSHINE PILLA ___________________________

 75. EDITHA FRAMAL GAERLAN ___________________________

76. ELLEN N. SACRISTIA ___________________________

We the undersigned, constituting a majority of Board of Directors of the Dilasag

Municipal Employees Credit Cooperative do hereby certify that the foregoing instrument is
the code by-laws of the said cooperative.

BUENAVENTURA A. GALINDO BLADIMIR M. BILLEDO

Director Director

ENGR. ALLAN M. SUBIA LEONILA S. DIZO

Director Vice-Chairperson

JONATHAN N. TUD
Chairperson