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Additional CPA Board

Exam Topics:
RFBT
February 3, 2018, ESSU, Borongan City
Additional Topics (Effective October 2017)

•Insolvency Law (5 items)


•Corporate Rehabilitation (5 items)
•Bouncing Check Law (3 items)
•Law on Cooperatives (10 items)
•PDIC Law (2 items)
Additional Topics (Effective October 2017)

•Bank Secrecy Law (2 items)


•General Banking Law (2 items)
•Anti-Money Laundering Law (2 items)
•New Central Bank Act (2 items)
•Intellectual Property Law (2 items)
INSOLVENCY LAW AND
CORPORATE REHABILITATION
Insolvency Law (RA 10142 or FRIA of 2010)

INSOLVENCY is the financial


condition of a debtor who:
• is unable to pay his liabilities as
they fall due in the ordinary course
of business; or
• has liabilities greater than his assets
Insolvency Law (RA 10142 or FRIA of 2010)

SUSPENSION OF PAYMENTS
 A petition of an individual debtor
possessing sufficient property to
cover all his debts but foreseeing
the impossibility of meeting them
when they respectively fall due.
Insolvency Law (RA 10142 or FRIA of 2010)

SUSPENSION OF PAYMENTS
 Must be filed before the court of
the province or city in which he
resides for six (6) months prior to the
filing of his petition.
Insolvency Law (RA 10142 or FRIA of 2010)
SUSPENSION OF PAYMENTS
 The petitioner must attach:
(a) a schedule of debts and
liabilities;
(b) an inventory of assets;
(c) a proposed agreement with
his creditors.
Insolvency Law (RA 10142 or FRIA of 2010)
VOLUNTARY INSOLVENCY
 A petition by an individual debtor
whose properties are not sufficient
to cover his liabilities, and owing
debts exceeding Five hundred
thousand pesos (P500,000.00), for
the discharge from his debts and
liabilities.
Insolvency Law (RA 10142 or FRIA of 2010)

VOLUNTARY INSOLVENCY
 Must be filed before the court of
the province or city in which he
resides for six (6) months prior to the
filing of his petition.
Insolvency Law (RA 10142 or FRIA of 2010)

VOLUNTARY INSOLVENCY
 The petitioner must attach:
(a) a schedule of debts and
liabilities;
(b) an inventory of assets;
Corporate Rehabilitation (A.M. No. 12-12-11-SC)

Rehabilitation shall refer to the


restoration of the debtor to a
condition of successful operation
and solvency.
Stay or Suspension Order

• Shall refer to an order in


conjunction with the
commencement order that shall
suspend all actions or
proceedings in court or otherwise.
Basis for the issuance of a Suspension Order

• Issuance of a commencement
order.
General Duties of a Receiver

• Preserve and maximize the value


of the assets of the debtor during
the rehabilitation proceedings;
• Determine the viability of the
rehabilitation of the debtor;
General Duties of a Receiver

• Prepare and recommend a


Rehabilitation Plan to the court;
• Implement the approved
Rehabilitation Plan
General Contents of a Rehabilitation Plan
• desired business targets or goals;
• duration and coverage of the
rehabilitation;
• terms and conditions of the
rehabilitation;
• means for the execution of the
rehabilitation plan
Content Description of Rehabilitation Petition

Shall establish the:


• Insolvency of the debtor;
• Viability of rehabilitation
Exclusion

• Banks
• Insurance companies
• Pre-need companies
• National and local government
units
BOUNCING CHECK LAW
Bouncing Check Law (BP 22)
CHECKS WITHOUT SUFFICIENT FUNDS
• the act of making and issuing a
check with knowledge by the
issuer that at the time the check is
issued, he does not have
sufficient funds; and
Bouncing Check Law (BP 22)
CHECKS WITHOUT SUFFICIENT FUNDS
• the failure to keep sufficient
funds to cover the full amount of
the check if presented within a
period of 90 days from the date
appearing on the check.
Bouncing Check Law (BP 22)
CONCLUSION OF PRIMA FACIE EVIDENCE
OF KNOWLEDGE OF INSUFFICIENCY OF
FUNDS
• failure of the drawer to pay the
holder or make arrangements for
payment in full by the drawee of
such check within (5) banking days
after receiving notice that such
check has not been paid by the
drawee.
Bouncing Check Law (BP 22)
CREDIT
• shall be construed to mean an
arrangement or understanding
with the bank for the payment of
such check.
LAW ON COOPERATIVES
Organization and Registration of Cooperatives

•15 or more natural persons may


organize a cooperative provided:
• Filipino citizens;
• Legal age;
• Have a common bond of interest
Organization and Registration of Cooperatives

• Actually residing or working in the


intended area of operations;
• Completed pre-membership
education seminar.
Organization and Registration of Cooperatives

• Shall exist for a period not


exceeding 50 years subject to
extension for 50 years;
• Shall file an Articles of
Cooperation and by-laws with
the CDA
Organization and Registration of Cooperatives

• 25% of the authorized capital


must be subscribed and 25% of
the subscription must be paid up
but not less than ₱15,000.
• Acquires juridical personality
from the time of issuance of the
Certificate of Registration.
Administration of Cooperatives

GENERAL ASSEMBLY
• Shall be composed of members
who are entitled to vote;
• Shall be the highest policy-
making body;
Administration of Cooperatives

GENERAL ASSEMBLY
• Shall exercise powers as
provided in the Articles and By-
Laws;
• Shall have the following
exclusive powers:
Administration of Cooperatives

(1)To determine and approve


amendments to the articles of
cooperation and bylaws;
(2) To elect or appoint the
members of the board of
directors, and to remove them
for cause.
Administration of Cooperatives

(3) To approve developmental


plans of the cooperative.
Administration of Cooperatives

BOARD OF DIRECTORS
• Shall be composed of at least 5
but not more than 15 members
elected by the General
Assembly;
• Shall have a term of 2 years;
Administration of Cooperatives

BOARD OF DIRECTORS
• Shall responsible for:
(1) Strategic planning;
(2) Direction setting;
(3) Policy formulation
Administration of Cooperatives
COMMITTEES
• Audit;
• Election;
• Mediation and Conciliation;
• Ethics;
•Other committees
Responsibilities, rights and privileges of
cooperatives
• Shall have an official postal
address to which all notices and
communications shall be sent;
• Shall maintain and keep
documents and reports ready
and accessible to its members
and representatives of the CDA
for inspection;
Responsibilities, rights and privileges of
cooperatives
• Shall make, publish and file the
reports required in this Code;
• Shall bond accountable officers;
• Shall have primary lien upon the
capital, deposits or interest of a
member for any debt due to the
cooperative from such a member;
Responsibilities, rights and privileges of
cooperatives

• Shall enjoy tax exemptions for


transactions with members;
• Shall be exempt from pre-
qualification bidding requirements
for transactions with the
Government;
• Shall have limited liability.
Capital, property, and funds of cooperatives
Capital may be sourced from:
• Member's share capital;
• Loans and borrowings including
deposits;
• Revolving capital which consists of
the deferred payment of patronage
refunds, or interest on share capital;
and
Capital, property, and funds of cooperatives

• Subsidies, donations, legacies,


grants, aids and such other
assistance from any local or
foreign institution whether public
or private.
Audit, inquiry, and members’ rights to examine
• Cooperatives registered under
this Code shall be subject to an
annual financial, performance
and social audit;
• The financial audit shall be
conducted by an external
auditor.
Audit, inquiry, and members’ rights to examine
• An Audit Report and audited
Financial Statements must be
submitted to the board of directors
and to the audit committee, which
shall be in accordance with the
generally accepted auditing
standards for cooperatives as jointly
promulgated by the Philippine
Institute of Certified Public
Accountants (PICPA) and the
Authority.
Audit, inquiry, and members’ rights to examine

• A member shall have the right to


examine the records required to be
kept by the cooperative during
reasonable hours on business days.
Allocation and distribution of funds

The net surplus of every


cooperative shall be distributed as
follows:
• General Reserve Fund (10%);
• Education and Training Fund
(10%);
Allocation and distribution of funds

• Community Development Fund


(3%);
• Optional Fund (7%);
• Dividends (70%)
a. Interest on Share Capital (70%)
b. Patronage Refund (30%)
Types and categories of cooperatives

CREDIT COOPERATIVE
• one that promotes and
undertakes savings and lending
services among its members.
Types and categories of cooperatives

CONSUMERS COOPERATIVE
• is one of the primary purpose of
which is to procure and distribute
commodities to members and
non-members.
Types and categories of cooperatives

PRODUCERS COOPERATIVE
• is one that undertakes joint
production whether agricultural
or industrial.
Types and categories of cooperatives

MARKETING COOPERATIVE
• is one which engages in the
supply of production inputs to
members and markets their
products.
Types and categories of cooperatives
SERVICE COOPERATIVE
• is one which engages in medical
and dental care, hospitalization,
transportation, insurance,
housing, labor, electric light and
power, communication,
professional and other services.
Types and categories of cooperatives

MULTI-PURPOSE COOPERATIVE
• is one which combines two (2) or
more of the business activities of
these different types of
cooperatives.
Types and categories of cooperatives
ADVOCACY COOPERATIVE
• is a primary cooperative which
promotes and advocates
cooperativism among its members
and the public through socially-
oriented projects, education and
training, research and
communication, and other similar
activities to reach out to its
intended beneficiaries.
Types and categories of cooperatives
AGRARIAN REFORM COOPERATIVE
• is one organized by marginal
farmers majority of which are
agrarian reform beneficiaries for the
purpose of developing an
appropriate system of land tenure,
land development, land
consolidation or land management
in areas covered by agrarian
reform.
Types and categories of cooperatives

COOPERATIVE BANK
• is one organized for the primary
purpose of providing a wide
range of financial services to
cooperatives and their members.
Types and categories of cooperatives

DAIRY COOPERATIVE
• is one whose members are
engaged in the production of
fresh milk which may be
processed and/or marketed as
dairy products.
Types and categories of cooperatives

EDUCATION COOPERATIVE
• is one organized for the primary
purpose of owning and operating
licensed educational institutions.
Types and categories of cooperatives
ELECTRIC COOPERATIVE
• is one organized for the primary
purposed of undertaking power
generations, utilizing renewable
energy sources, including hybrid
systems, acquisition and operation
of subtransmission or distribution to
its household members.
Types and categories of cooperatives

FINANCIAL SERVICE COOPERATIVE


• is one organized for the primary
purpose of engaging in savings
and credit services and other
financial services.
Types and categories of cooperatives

FISHERMEN COOPERATIVE
• is one organized by marginalized
fishermen in localities whose
products are marketed either as
fresh or processed products.
Types and categories of cooperatives

HEALTH SERVICES COOPERATIVE


• is one organized for the primary
purpose of providing medical,
dental and other health services.
Types and categories of cooperatives

HOUSING COOPERATIVE
• is one organized to assist or
provide access to housing for the
benefit of its regular members
who actively participate in the
savings program for housing.
Types and categories of cooperatives

INSURANCE COOPERATIVE
• is one engaged in the business of
insuring life and poverty of
cooperatives and their members.
Types and categories of cooperatives

TRANSPORT COOPERATIVE
• is one which includes land and
sea transportation, limited to
small vessels.
Types and categories of cooperatives

WATER SERVICE COOPERATIVE


• is one organized to own, operate
and manage waters systems for
the provision and distribution of
potable water for its members
and their households.
Types and categories of cooperatives

WORKERS COOPERATIVE
• is one organized by workers,
including the self-employed, who
are at same time the members
and owners of the enterprise.
Merger and consolidation of cooperatives
•Two (2) or more cooperatives
may merge into a single
cooperative;
• No merger or consolidation shall
be valid unless approved by a
three-fourths (3/4) vote of all the
members with voting rights;
Merger and consolidation of cooperatives
• The CDA shall issue the guidelines
governing the procedure of
merger or consolidation of
cooperatives;
• The merger or consolidation shall
be effective upon the issuance of
the certificate of merger or
consolidation by the CDA.
Dissolution of cooperatives

•Voluntary
a. No creditors are affected
b. Creditors are affected
• Involuntary
Dissolution of cooperatives
VOLUNTARY (a)
• May be affected by a majority
vote of the board of directors,
and by a resolution duly adopted
by the affirmative vote of at least
three-fourths (3/4) of all the
members with voting rights;
Dissolution of cooperatives
VOLUNTARY (a)
• Notice of time, place and object of
the meeting shall be published for
three (3) consecutive weeks in a
newspaper published in the place
where the principal office of said
cooperative is located, or if no
newspaper is published in such
place, in a newspaper of general
circulation in the Philippines;
Dissolution of cooperatives

VOLUNTARY (a)
• Notice of such meeting is sent to
each member of record either by
registered mail or by personal
delivery at least thirty (30) days
prior to said meeting;
Dissolution of cooperatives

VOLUNTARY (a)
• A copy of the resolution
authorizing the dissolution shall be
certified to by a majority of the
board of directors and
countersigned by the board
secretary.
Dissolution of cooperatives
VOLUNTARY (b)
• The petition for dissolution shall be
filed with the CDA;
• The petition shall be signed by a
majority of its board or directors or
other officers managing its affairs,
verified by its chairperson or board
secretary or one of its directors;
Dissolution of cooperatives
VOLUNTARY (b)
• The petition shall set forth all
claims and demands against it
and that its dissolution was
resolved upon by the affirmative
vote of at least three-fourths (3/4)
of all the members with voting
rights.
Dissolution of cooperatives
INVOLUNTARY
• A cooperative may be dissolved
by order of a competent court
after due hearing on the grounds
of:
Dissolution of cooperatives

• Violation of any law, regulation or


provisions of its by-laws; or
• Insolvency
PDIC LAW
Insurable deposits and maximum liability
•Amount due to any bona fide
depositor for legitimate deposits
in an insured bank net of any
obligation of the depositor to the
insured bank as of date of
closure, but not to exceed
₱500,000.00.
Insurable deposits and maximum liability

The following are not covered:


• Investment products such as
bonds, securities and trust
accounts;
• Deposit accounts which are
unfunded, fictitious or fraudulent;
Insurable deposits and maximum liability
The following are not covered:
• Deposit products constituting or
emanating from unsafe and
unsound banking practices;
• Deposits that are determined to be
proceeds of an unlawful activity as
defined under the Anti-Money
Laundering Law.
Insurable deposits and maximum liability

• The claim for the uninsured


portion of the deposit is a claim
against the assets of the closed
bank.
Requirement of claims
•ORIGINAL EVIDENCE OF DEPOSITS
(passbook, certificate of time
deposit, bank statement, used or
unused checks, or ATM card);
• TWO (2) VALID ORIGINAL PHOTO-
BEARING IDENTIFICATION DOCUMENT
(ID) with clear signature of
depositor/claimant;
Requirement of claims
•Photocopy of BIRTH CERTIFICATE
from the Philippine Statistics
Authority (For depositors below
eighteen (18) years old);
• Original copy of a notarized
Special Power of Attorney (SPA) for
claimants who are not the
signatories in the bank records;
Requirement of claims

• Accomplished Claim Form.

Depositors with valid deposit


accounts with balances of
P100,000.00 and below are not
required to file claims.
SECRECY OF BANK DEPOSITS AND
UNCLAIMED BALANCES LAW
Coverage of Bank Secrecy

•All deposits of whatever nature with


banks or banking institutions in the
Philippines including investments in
bonds issued by the Government of
the Philippines, its political
subdivisions and its instrumentalities,
are hereby considered as of an
absolutely confidential.
Exceptions
• upon written permission of the
depositor;
• in cases of impeachment;
• upon order of a competent court in
cases of bribery or dereliction of
duty of public officials;
Exceptions

• in cases where the money


deposited or invested is the
subject matter of the litigation.
Punishable Act

• Unauthorized disclosure by an
official or employee of a banking
institution.
Unclaimed balances (PD 679)
• Shall include credits or deposits of
money, bullion, security or other
evidence of indebtedness of any kind,
and interest thereon with banks, buildings
and loan associations, and trust
corporations, as hereinafter defined, in
favor of any person known to be dead or
who has not made further deposits or
withdrawals during the preceding ten
years or more.
Unclaimed balances (PD 679)
• Such unclaimed balances,
together with the increase and
proceeds thereof, shall be
deposited with the Treasurer of the
Philippines to the credit of the
Government of the Republic of the
Philippines to be used as the
Congress may direct.
GENERAL BANKING LAW
Different kinds of loans
EMERGENCY LOAN
• is a credit facility that is intended
to assist a bank experiencing
serious liquidity problems arising
from causes not attributable to,
or beyond the control of, the
bank management.
Different kinds of loans
MICROFINANCE LOAN
• This represents small loans granted to the
basic sectors such as farmer-peasant,
artisanal fisherfolk, workers in the formal
and informal sector, migrant workers,
indigenous peoples and cultural
communities, women, differentlyabled
persons, senior citizens, victims of
calamities and disasters, youth and
students, children, and urban poor.
Different kinds of loans
CONSUMER LOAN
• is defined to include housing loans,
loans for purchase of car, household
appliance(s), furniture and fixtures,
loans for payment of educational and
hospital bills, salary loans and loans for
personal consumption, including
credit card loans.
ANTI-MONEY LAUNDERING LAW
Covered transactions

• A transaction in cash or other


equivalent monetary instrument
involving a total amount in excess
of five hundred thousand pesos
(₱500,000.00) within one (1)
banking day.
Suspicious transactions

A transaction, regardless of
amount, where any of the
following circumstance exists:
• there is no underlying legal or
trade obligation, purpose or
economic justification;
Suspicious transactions

• the client is not properly


identified;
• the amount involved is not
commensurate with the business
or financial capacity of the client;
Suspicious transactions
• taking into account all known
circumstances, it may be
perceived that the client’s
transaction is structured in order
to avoid being the subject of
reporting requirements under the
act;
Suspicious transactions

• any circumstance relating to the


transaction which is observed to
deviate from the profile of the
client and/or the client’s past
transactions with the covered
institution;
Suspicious transactions

• the transaction is in any way


related to an unlawful activity or
any money laundering activity or
offense under the AMLA, as
amended, is being or has been
committed;
Suspicious transactions

• any transaction that is similar,


analogous or identical to any of
the foregoing.
Reportorial requirements
•Covered institutions shall report to
the AMLC all covered transactions
and suspicious transactions within
five (5) working days from
occurrence thereof, unless the
Supervising Authority prescribes a
longer period not exceeding ten (10)
working days.
Reportorial requirements

•Should a transaction be
determined to be both a
covered transaction and a
suspicious transaction, the
covered institution shall be
required to report the same as a
suspicious transaction.
THE NEW CENTRAL BANK ACT
Legal tender power over coins and notes

•All notes and coins issued by the


Bangko Sentral shall be fully
guaranteed by the Government
of the Republic of the Philippines
and shall be legal tender in the
Philippines for all debts, both
public and private.
Legal tender power over coins and notes

• Coins shall be legal tender in


amounts not exceeding Fifty
pesos (P50.00) for denominations
of Twenty-five centavos and
above; and
Legal tender power over coins and notes

• in amounts not exceeding


Twenty pesos (P20.00) for
denominations of Ten centavos or
less.
Conservatorship
• The appointment by the
Monetary Board of a conservator
after it finds that a bank or a
quasi-bank is in a state of
continuing inability or
unwillingness to maintain a
condition of liquidity adequate to
protect the interest of depositors
and creditors;
Conservatorship

• The conservatorship shall not


exceed one year;
Receivership
The Monetary Board may
designate the PDIC as receiver of
a bank and any person of
recognized competence in
banking or finance as receiver of
a quasi-bank when it finds that the
institution:
Receivership

• Is unable to pay its liabilities as


they become due in the ordinary
course of business when the
inability to pay is caused by
extraordinary demands caused
by financial panic in the banking
community;
Receivership

• Has insufficient realizable assets


to meet its liabilities;
• Cannot continue in business
without involving probable losses
to its depositors or creditors; or
Receivership

• Has willfully violated a cease and


desist order under Section 37 that
has become final, involving acts
or transactions amounting to
fraud or a dissipation of the assets
of the institution.
Receivership

• Designation of a conservator is
not a precondition to the
designation of a receiver.
INTELLECTUAL PROPERTY LAW
Law on Patent

•Any technical solution of a


problem in any field of human
activity which is new, involves an
inventive step and is industrially
applicable shall be patentable.
Law on Patent

• The right to a patent belongs to


the inventor, his heirs, or assigns.
When two (2) or more persons
have jointly made an invention,
the right to a patent shall belong
to them jointly.
Law on Patent
• If two (2) or more persons have
made the invention separately and
independently of each other, the
right to the patent shall belong to the
person who filed an application for
such invention, or where two or more
applications are filed for the same
invention, to the applicant who has
the earliest filing date or, the earliest
priority date.
Law on Patent

• A patent application, which has


not yet been published, and all
related documents, shall not be
made available for inspection
without the consent of the
applicant.
Law on Patent

• If the required fees for grant and


printing are not paid in due time,
the application shall be deemed
to be withdrawn.
Law on Patent

• A patent shall take effect on the


date of the publication of the
grant of the patent in the IPO
Gazette.
• The term of a patent shall be
twenty (20) years from the filing
date of the application.
Law on Trademarks, Service Marks and Trade
Names

•The rights in a mark shall be


acquired through registration
made validly in accordance with
the provisions of this law.
Law on Trademarks, Service Marks and Trade
Names
• The owner of a registered mark shall
have the exclusive right to prevent all
third parties not having the owner’s
consent from using in the course of
trade identical or similar signs or
containers for goods or services which
are identical or similar to those in
respect of which the trademark is
registered where such use would
result in a likelihood of confusion.
Law on Trademarks, Service Marks and Trade
Names

• A certificate of registration shall


remain in force for ten (10) years.
Law on Trademarks, Service Marks and Trade
Names
• The owner of a registered mark
may recover damages from any
person who infringes his rights, and
the measure of the damages
suffered shall be either the
reasonable profit which the
complaining party would have
made.
Law Copyright

• Literary and artistic works are


original intellectual creations in the
literary and artistic domain are
protected from the moment of
their creation.
Law Copyright

• The fair use of a copyrighted work


for criticism, comment, news
reporting, teaching including
multiple copies for classroom use,
scholarship, research, and similar
purposes is not an infringement of
copyright.
Law Copyright

• The private reproduction of a


published work in a single copy,
where the reproduction is made by
a natural person exclusively for
research and private study, shall be
permitted, without the authorization
of the owner of copyright in the
work.
Law Copyright

• Any library or archive whose


activities are not for profit may,
without the authorization of the
author of copyright owner, make a
single copy of the work by
reprographic reproduction.
Law Copyright

• It shall not be permissible to


produce a volume of a work
published in several volumes or to
produce missing tomes or pages of
magazines or similar works, unless
the volume, tome or part is out of
stock.
Law Copyright
• In every sale or lease of an original
work of painting or sculpture or of the
original manuscript of a writer or
composer, subsequent to the first
disposition thereof by the author, the
author or his heirs shall have an
inalienable right to participate in the
gross proceeds of the sale or lease to
the extent of five percent (5%).
Law Copyright

• The copyright in works shall be


protected during the life of the
author and for fifty (50) years after
his death.
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