General Steps in forming a Cooperative

Step 1 : Get Organized.

In organizing a cooperative, there must be at least 15 members. Determine the common problem that the members want to solve through cooperative.

The objective/nature of business of the proposed cooperative should be substantially related to the common problem of the members. The common problem may be in the area of : production of goods and services, marketing of your produce, financing assistance, insurance, banking, power distribution, water services, etc.

Step 2 : Prepare an Economic Survey *

The preparation of an Economic Survey will help the organizing members determine the sustainability and viability of operating a cooperative.

Step 3 : Draft the Cooperative's By-Laws *

The by-laws will provide the basis for orderly governing the affairs of the cooperative

Step 4 : Draft the Articles of Cooperation *

The articles of cooperation will provide for the name of the proposed cooperative, its term of existence, its members, its capital structure, and other relevant information.

Step 5 : Secure bond of accountable officers from Insurance Company.

Normally, the treasurer and the manager are bonded. The amount of bond is to be decided by the board of directors based on the initial networth of the cooperative including paid-up capital, membership fees and other assets of the cooperative at the time of registration.

Step 6 : Register with the Cooperative Development Authority

The proposed cooperative must submit 4 copies each of the Economic Survey, By-laws and the Articles of Cooperation and bond of accountable officers.

*The CDA has prepared a pro-forma Economic Survey, By-laws and Articles of Cooperation to guide the proposed cooperative in the preparation of the said documents.