4xAgs said:
Gotta admit that I've never ran that past my attorney. Guess I fundamentally trust the people that I enter into a partnership with.
I'm not an attorney but I don't think an LLC can commit a crime. I guess we could be at risk of the asset getting seized.
We're just a couple of recreational pilots that like the fact we can get more plane by buying together. And in reality most individual pilots don't utilize the plane enough to own it outright.
I'm not an attorney but used to operate a fleet of 150 business jets each with at least four different owners...probably and average of seven owners. My suggestions would be:
- The aircraft should be owned by an LLC.
- You need to know your partners as the plane could be seized if illegal drugs are found in them and the value of your ownership share in the LLC would be affected.
- I would recommend not allowing partners to finance their share using their ownership as security. But if they do, make sure members agreement requires the use of the aircraft to not be impacted by any default and make sure there are meaningful requirements for any owner that the bank may subsequently sell the share to.
- Insurance is everything. Make sure there is strict compliance with the terms of the policy.
- Make sure there are adequate reserves maintained for the engines. Don't just agree that everyone will contribute their ownership share for engine overhaul. Cash money needs to be paid into a reserve account for engine overhaul by hour flown. If sold between overhauls, the reserve either goes to the overhaul prior to sale or is divided based upon ownership percentage.
- Good fences make good neighbors. Have a meaningful process for securing first rights to use of the aircraft. Try to accumulate an ownership group with varying needs for the aircraft. For instance, for every owner that is primarily going to use for business during the week, have an owner that is primarily going to use for pleasure on the weekend. Determining how to split use on holidays will be critical.
- Ensure use of the plane by other members are not impacted by the divorce of another member. Good strategy can be a poison pill that makes ownership of the share by an ex-spouse not very attractive. But absolutely don't have terms that allow the ex spouse to screw with the others' lives.
- What is legal under part 91 doesn't mean it's safe. Agree on prohibited operations that may be legal but not the greatest idea. For example, night time VFR flights into/out of Aspen.
- Ensure that all partners remaining compliant with both FAA and DOT requirements when it comes to charging others to fly them. Make sure passengers understand this.....think ramp checks with your passengers answering questions without you present.
Not actually very complicated, but just cover your bases up front so that everyone is happy and satisfied and problems that can be addressed up front don't become unhappy confrontations.
Again....not an attorney....just things that experience has demonstrated are common and helpful
Have fun!
