California corp.

"Robert M. Gary" wrote in message
om...

A Mutual Benefit Corp is already set up as non-profit. Once to corp is
approved you are already exempt from the $800/yr. You just need to
file to show that you don't make money.

This must be new. When I was on the board of a flying club
some years back, we had to apply for non-profit status (through
the IRS, not CA). As I remember, it took over a year to come
through. We also made money (well, had a small positive retained
earnings) from time to time without having to pay tax. The point is
that you don't *intend* to make money.


Can you buy insurance to protect yourself against non-aviation
activities your partner does while going to the airport?

General liability insurance probably covers it. The point is not that
a corporation is necessarily *wrong*, just that there are other ways
to achieve what you want. Maintaining a corp is a pain in the arse,
with big penalties if you bugger it up -- penalties for not filing things
on time, worries about people piercing the corporate veil, directors
being liable for errors and omissions. Talk to your insurance agent.


Perhaps the next class will deal with "piercing the corporate veil".
You might not be as enthusiastic about corporate ownership after
that.

It can actually be pretty tough to break, otherwise no one would ever
both with corporations. However, you do have to careful. If you load a
plane over gross and crash into someone, the corp is going to do you
any good, but it won't hurt you either.

Depends how tough your opponents lawyer is, and how much money
*you* have! They may well try, and you'd have to defend. Even if you
are squeaky clean, it'd be big bucks. It may even be that setting up
the corporation deliberately to avoid personal liability is sufficient to
invalidate it. And even if the liability in some accident is finally pinned
on the corporation, you - as a director - may end up under the spotlight
for not properly running the operation of the corporation. I've know
wealthy people who have refused to be corporate officers because
of just such concerns.

One big advantage you've not touched on. Having the corp own the
plane makes it much easier for 'partners' to come and go. And since
the plane title doesn't change, there's no question about liability for
use tax no matter which states the 'partners' live.