WHEREAS, it is known that Samahang Nayons, Pre-Cooperatives and Kilusang Bayan established and created under Presidential Decree No. 175 and Letter of Implementation No. 23 are still existing and operating as such up to this time;

WHEREAS, PD 175 and LOI 23 have been expressly repealed by RA 6938 without however providing a system for the treatment of the Samahang Nayons and Pre-Cooperatives.

WHEREAS, if such Samahang Nayons and Pre-Cooperatives will not be converted into cooperatives, the national federations of cooperative rural banks, AMCs and CISPs, will collapse for not having a membership of duly registered cooperatives; and

WHEREAS, it is imperative to legalize the existence of Samahang Nayons under RA 6938 in order to enable them to operate and continue to contribute to the country's socio-economic progress or growth and to protect both the interest of the members of said Samahang Nayons and the public in general;

THEREFORE, in the interest of the public service and to protect the viability of the Samahang Nayons and pre-cooperatives, the CDA provides hereunder the procedural guidelines on the conversion of such Samahang Nayons and Pre-Cooperatives:

SECTION 1.       Documents to be Surrendered - A duly registered Samahang Nayon or a pre-cooperative may be converted into a cooperative upon surrender of the following documents to the CDA office.

1. Certificate of Registration;
   
   
2. Articles of Incorporation; and
   
   
3. By-laws

SECTION 2.       Requirements for Conversion - A Samahang Nayon or a Pre-Cooperative after compliance with Section 1 above, shall submit the hereunder documents to the same CDA office.

a.      Four (4) copies of Articles of Cooperation in accordance with the Cooperative Code with Treasurer's affidavit;

b.      Four (4) copies of Bylaws in accordance with the Cooperative Code;

c.       Audited Financial Statements for the last two (2) years preceding the conversion attested by AIC.

d.      Bond of Accountable Officers; and

e.      Registration fee.

Provided, however that if there is an existing cooperative in the area wherein the Samahang Nayon to be converted is located, its economic feasibility and viability shall be determined and established.

SECTION 3.       Registration of Samahang Nayon as a Cooperative - Upon approval of the aforecited submitted documents, the CDA Extension Office concerned shall register such Samahang Nayon or Pre-cooperative as a cooperative.  The Certificate of Registration shall be issued to it.

SECTION 4.       Compliance - The cooperative, after registration shall comply with RA 6938, RA 6939, Rules and Regulations, CDA Issuances, its articles of cooperation and by-laws and other pertinent laws.

SECTION 5.       Applicability - Such cooperatives shall be entitled to all the rights, privileges and benefits provided under RA 6938.

SECTION 6.       Period for Conversion - Such Samahang Nayons and other pre-cooperatives are given until September 30, 1993 within which to convert themselves into a cooperative, otherwise, their Certificate as Samahang Nayon shall be cancelled automatically.

SECTION 8.       Effectivity - These procedural guidelines shall take effect upon approval by the Board of Administrators.

Adopted: 8 July 1992

(Sgd.) EDNA E. ABERILLA
Chairman
Board of Administrators