Why Business Codes Are Important for Tribal Economic Development

Engaging in planning practices and establishing a land-use policy will ensure that Tribal lands and natural resources are used efficiently and consistent with best practices that allow the Tribes to maximize capture economic opportunities.

If Tribes wish to start a business operation, it is essential that they first establish a proper business environment to have a greater likelihood of success. In many cases Tribes lack an understanding of the fundamental rules that guide business activities and encourage robust economic development. These rules include corporate codes, limited liability company codes and commercial codes.

Corporation Codes

Corporate codes lay the framework for being able to incorporate a Tribally chartered economic development corporation (or any other type of corporate entity, including a non-profit). Wholly owned Tribal corporations can act as holding companies and are the foundation for successfully isolating business from politics through the establishment of an independent board of directors, which should hire an experienced management team to oversee subsidiary entities that engage in specialized business activities.  

View a Model Tribal Business Corporation Code provided by the Michigan Economic Development Corporation.

Limited Liability Company (LLC) Codes

LLC codes encourage entrepreneurship on a reservation by establishing a business-friendly environment in which individual Tribal members and the Tribe can establish their own business under a Tribal LLC code rather than defaulting to a state’s LLC code.

View a Model Tribal Limited Liability Company Code provided by the Michigan Economic Development Corporation.

View the Limited Liability Company Act provided by the Uniform Law Commission.

Uniform Commercial Codes (UCC)

The Model Tribal Secured Transactions Act (MTSTA) is based on UCC Article 9 that establishes a legal framework for the promotion of private business through secured transactions. Secured transactions are loans in which personal property, other than real estate, is used as collateral. The MTSTA is a key element for the growth of entrepreneurship because it provides an effective method for financing and securing business transactions.

For more guidance, refer to "Uniform Commercial Codes: Bringing Business to Indian Country" provided by Susan Woodrow of the Federal Reserve Bank Minneapolis/Helena Branch.

View a copy of the Revised Tribal Secured Transactions Act.

View the Implementation Guide and Commentary to the Revised Model Tribal Secured Transactions Act.