Shared Ownership 1987 Mooney M20J

Steve,

I am a co-owner of a '79 Mooney 201 and have been for over 2 years now.
Before buying the plane my partner and I had only rented and been in
clubs so we were VERY green at the aircraft owning thing. In our case
it might have been a little easier because since we didn't already own
we knew that all the expenses would just be split down the middle.

We found a plane that we both liked and then bought it (paid too much of
course but that is another thread altogether). The way we work our
partnership is that we have a Limited Liability Corporation that "owns"
the plane and we own the corporation.

As far as expenses go we start off the the month with an equal share of
fixed costs that include the note on the plane, hanger rent, insurance
escrow and XM weather for the month (gotta have that!!). Then we
decided on an hourly wet rate that will include fuel, engine and prop
reserve, and an escrow for the annual inspection.

Any maintenance or upgrades gets split right down the middle and paid at
the end of the month that the expense was encountered. I keep the books
and send out a bill at the end of the month with the expectation that
the money be deposited sometime in the week after the the bill was sent.

I feel extremely fortunate to have found a great guy for a partner.
We've never had an issue with money or availability of the aircraft, and
I think these are the two biggest things that can kill a partnership.

We would even entertain the possibility of one last partner but 3 would
be the most we would do before availability could start to cloud the deal.

Good luck and my opinion is that unless you have a LOT of extra
disposable income, then a partnership is a great way to afford and fly a
nice aircraft.
Jon




Steve B wrote:
I am not flying my plane enough and would like to consider a
partnership arrangement for the aircraft. I plan on having the aircraft
based on the west coast. I hope to start a partnership with 1/4 shares
at 22500.00 I am new to the dynamics of sharing ownership and flying
costs. Just curious if there is anybody that can share experiece with a
shared aircraft arrangement.

"Jim Macklin" wrote in message
...
[...]
Incorporation and owning shares protects your assets.

Incorporation and owning shares MAY protect your assets. If you are in any
way principally responsible for the maintenance and operation of the
partnership and airplane, the corporate veil may not protect you.

Jim Macklin wrote:
If you have a partnership on an airplane with three
partners... and two partners are flying together and crash
and die, also killing some people on the ground...
The surviving partner is legally liable as the owner of the
airplane... His personal assets are on the line;home,
businesses, everything.

Incorporation and owning shares protects your assets.

*maybe*. A good friend of mine was actually in that situation and the
judge dismissed him from the case because he said his ownership in the
airplane didn't make him liable for the accident.

However, I did incorporate my airplane. I'm not sure I would do it
again. In California its a **LOT** of work. The tax on the corporation
minimum tax (regardless of what state you incorporate in) is $800/yr if
the corp has *ANY* visibility in the state of CA. Waving that requires
about 2" of paperwork (I've done it twice now). Plus you must file a
Secretary of State statement every year declaring officers and pay an
addition $25. Forgetting to do that will result in going to jail.

-Robert

In Indiana it cost $90 one time to set up the LLC and you are done. You
just listed several more reasons not to live in California.

Robert M. Gary wrote:

Jim Macklin wrote:

If you have a partnership on an airplane with three
partners... and two partners are flying together and crash
and die, also killing some people on the ground...
The surviving partner is legally liable as the owner of the
airplane... His personal assets are on the line;home,
businesses, everything.

Incorporation and owning shares protects your assets.


*maybe*. A good friend of mine was actually in that situation and the
judge dismissed him from the case because he said his ownership in the
airplane didn't make him liable for the accident.

However, I did incorporate my airplane. I'm not sure I would do it
again. In California its a **LOT** of work. The tax on the corporation
minimum tax (regardless of what state you incorporate in) is $800/yr if
the corp has *ANY* visibility in the state of CA. Waving that requires
about 2" of paperwork (I've done it twice now). Plus you must file a
Secretary of State statement every year declaring officers and pay an
addition $25. Forgetting to do that will result in going to jail.

-Robert

Jim Macklin wrote:

Incorporation and owning shares protects your assets.



Right!

And if you're not personally involved in the accident, a simple LLC can
offer plenty of protection for a reasonable price, both in dollars and
effort. The LLC can go a long way toward protecting personal assets if
one of the other owners has a problem.

I prefer to spend the extra effort to set myself up for happy-happy
endings. In other words, I'm happy if it works out well, and I'm as
happy as possible if it works out poorly. Not possible to get set up
that way? The deal probably isn't a good idea.