The Māori Land Court can constitute a Māori incorporation over one or more blocks of Māori freehold land provided that at least one of the blocks has more than two owners. Incorporations constituted under Te Ture Whenua Māori Act 1993 have power to do everything a body corporate can do.
The capacity and powers of Māori incorporations are set out in the order of incorporation, constitution and the Te Ture Whenua Māori Act 1993.
Māori incorporations are also permitted over Māori reserved land previously administered by the Māori Trustee. Māori incorporations set up over Māori reserve land include:
- Paranihihi Ki Waitotara Incorporation
- Mawhera Incorporation
- The Wakatu Incorporation
Before 1 July 1993 the powers of Māori incorporations were limited to the objectives specified in the order of incorporation.
Any incorporation in existence at the date of the commencement of the Act may now, pursuant to a special resolution passed by the shareholders, apply to the court to vary the objectives to include any of the provisions of Te Ture Whenua Māori Act 1993 or any regulations made under the Act.
The main advantages of a Māori incorporation are:
- Body corporate status provides for perpetual succession and limited liability
- Extension of powers and objectives facilitates land management and development by the committee of management.
- Reasonably clear constitution
- Specific reporting and accountability rules
- Restrictions on alienation
- Beneficial interest remains vested in the owners
- Members of the committee do not have the obligations that directors have under the Companies Act 1993
The main disadvantages of a Māori incorporation are:
- Restrictions on alienation by way of sale or gift
- Restrictions on long-term leases for more than 52 years
- Intervention by the Māori Land Court
- High level of beneficiary participation
Appointment of a Committee of Management
Upon the making of an order incorporating the owners of any land, the Māori Land Court appoints an interim committee of management consisting of not less than three nor more than seven persons.
The persons who are appointed hold office as interim members of the committee of management until the first annual general meeting of the incorporation.
At the first annual general meeting of shareholders the shareholders elect a committee of management.
What does a Committee of Management do?
The main function of the committee of management is to make decisions on behalf of the shareholders of the incorporation. The committee's essential role is to lead the incorporation safely and successfully into the future.
As well as Te Ture Whenua Māori Act 1993, committee members should also familiarise themselves with the constitution and any limitations or restrictions contained in the Order of Incorporation.
A committee should:
- Review and consult with the shareholders regarding its functions including annually reviewing the committee's performance against those functions
- Set the mission, vision and values
- Agree to the strategic plan, operating plan and budget
- Ensure adequate resources to achieve agreed objectives
- Monitor management progress towards objectives
- Ensure compliance with relevant laws and obligations
- Provide full disclosure on the organisation's affairs
- Mentor, monitor and evaluate the manager
- Communicate with stakeholders