Understanding Section 17 Corporations: The Key to Tribal Business Growth

Unlocking Economic Power Through Federally Chartered Tribal Entities

Section 17 Corporations, created under the Indian Reorganization Act of 1934 (IRA), are among the most powerful legal structures available to Native American tribes seeking to engage in commerce while maintaining their sovereign status. These federally chartered entities offer tribes the ability to form corporations that can hold property, enter contracts, and conduct business both on and off reservation lands — all while preserving the unique benefits of tribal sovereignty.

What Is a Section 17 Corporation?

A Section 17 Corporation is a federally chartered business entity that is wholly owned by a tribal government. These entities are created when a tribal nation submits a charter to the Secretary of the Interior for approval under Section 17 of the IRA. Once approved, the corporation receives a federal charter, giving it a legal identity separate from the tribal government, yet still rooted in tribal ownership and governance.

This separation is key. While the tribe remains the sole shareholder, the corporation is treated as a distinct legal entity — which offers several operational and legal advantages for both the tribe and its business partners.

Learn more from the Bureau of Indian Affairs (BIA)

Benefits of a Federally Chartered Corporation

Section 17 Corporations combine the best aspects of tribal sovereignty with the legal benefits of corporate status. Some of the most important advantages include:

• Legal Capacity: Can sue and be sued, enter contracts, acquire and dispose of property.
• Limited Waiver of Sovereign Immunity: Business partners may require a limited waiver for dispute resolution, which can be included without compromising tribal sovereignty overall.
• Federal Recognition: These corporations are federally chartered, making them easily recognizable and credible to government agencies, banks, and contractors.
• Tax Advantages: Income derived from tribal businesses, including Section 17 Corporations, is often exempt from federal and state income taxes.
• Sovereign Protections: While separate from the tribe, the corporation benefits from many of the legal immunities and exemptions of the tribal government.

How Section 17 Corporations Differ from State-Chartered Entities

While tribes can also charter businesses under tribal or state law, Section 17 Corporations have a distinct advantage when it comes to off-reservation operations, federal contracts, and interactions with outside institutions. For example:

• Tribal Corporations: Created under tribal law, valid within tribal jurisdiction, and may be less recognizable to external investors or agencies.
• State Corporations: Subject to state law and taxation, lack sovereign protection, and may undermine tribal jurisdiction.
• Section 17 Corporations: Federally chartered, recognized across jurisdictions, and offer tax and regulatory advantages while preserving sovereignty.

Structure and Governance of a Section 17 Corporation

The governance of a Section 17 Corporation is determined by its corporate charter, which outlines the roles of the board of directors, executive officers, and shareholders. The tribal council often acts as the shareholder representative, while day-to-day operations are managed by corporate officers and staff — ensuring the business can operate with professional independence while still aligning with tribal values and strategic goals.

Business Activities and Industry Flexibility

Section 17 Corporations can engage in virtually any lawful business activity, from tourism and retail to energy and technology. Examples of industries where these corporations thrive include:

• Construction and Infrastructure: Managing major development projects on and off tribal lands.
• Renewable Energy: Establishing solar, wind, and geothermal energy companies with DOE loan guarantees.
• Federal Contracting: Pursuing 8(a), HUBZone, and Buy Indian Act contracting opportunities.
• Hospitality and Tourism: Running resorts, hotels, casinos, and cultural attractions.
• Banking and Finance: Launching tribal banks or investment arms.

See: U.S. Department of Energy - Office of Indian Energy Policy and Programs

Relationship to Federal Contracting and SBA Programs

Section 17 Corporations are particularly well-positioned to take advantage of federal contracting programs:

• 8(a) Program: Tribally owned firms can receive sole-source contracts up to $25 million for Department of Defense contracts and $7 million for others, without competition. More on the SBA 8(a) Program
• HUBZone Certification: Many tribal areas qualify as Historically Underutilized Business Zones (HUBZones), granting priority in contracting and bidding.
• Buy Indian Act: Tribal firms receive procurement preferences from the Bureau of Indian Affairs (BIA) and Indian Health Service (IHS).

Real-World Examples of Section 17 Success

Many tribes have leveraged Section 17 Corporations to build successful business empires. For example:

• Ho-Chunk, Inc. (Winnebago Tribe of Nebraska): A multi-industry corporation operating construction, real estate, and tech ventures nationwide.
• Sealaska Corporation (Tlingit, Haida, and Tsimshian tribes of Alaska): A diversified holding company with international operations.
• Cherokee Nation Businesses: Manages over 35 companies in sectors including healthcare, IT, and defense contracting.

How to Form a Section 17 Corporation

The process is initiated by submitting a draft charter to the Secretary of the Interior via the BIA. The key steps include:

1. Drafting a corporate charter that meets regulatory requirements.
2. Obtaining tribal council approval via resolution.
3. Submitting the documents to the BIA Regional Office for review.
4. Receiving approval and federal charter signature by the Secretary of the Interior.

After formation, the tribe may also register the corporation with SAM.gov, apply for SBA certifications, and open bank accounts for operational use.

Helpful resource: Federal Register: Section 17 Corporation Rulemaking

Best Practices for Governance and Operations

To ensure the long-term success of a Section 17 Corporation, tribes should adopt business practices that include:

• Independent board members with industry expertise
• Performance-based executive management
• Transparency and annual reporting to the tribal council
• Strategic planning and diversification initiatives
• Audit and risk management frameworks

Conclusion: A Strategic Vehicle for Sovereign Prosperity

Section 17 Corporations offer tribes a critical path to economic self-sufficiency while maintaining tribal governance and cultural integrity. They serve as a bridge between traditional tribal sovereignty and modern capitalism, allowing tribes to participate in national and global markets on their own terms.

For businesses and partners seeking reliable and sovereign-aligned ventures, Section 17 Corporations are a proven model that balances legal security, tax advantages, and cultural alignment.