My graduate law class just covered legal entities. By luck my partner
and I had registered our Mooney in a Mutual Benefit Corp (C-corp). Had
we not, the attorney teaching the class said we would probably be
considered "Partners" under the eyes of the law. If we had just put
the plane in our names we would have been "Partners". As near as I can
tell "Partners" is the laws punishment for not doing anything else,
"Partners" happens automatically by default. "Partners" is the worse
case scenario because it comes with unlimited liability. If your
partner is driving to the airport and hits a dog, the dog's owner can
sue you and take your house.
In some states LLCs are a good way to establish. However, in
California LLCs have a minimum state tax of $800/year. Some people
tried to get smart and create their LLCs in other states. Well,
California now has a business fee for out of state LLCs of, guess
what, $800/year. Its kind of like sales tax. They can't charge you
8% for a plane you bought out of state, but they can charge you an 8%
"use tax" when you get it here (although there are some ways to avoid
that).
In anycase, I guess we got dumb lucky when we decided to create a
corporation. The only downside is that we have to have an annual
meeting, save meeting minutes, have officers, and report taxes
(although the corp's taxes are zero).

-Robert, living and learning