building as a business

[JonJay]

If you really want to do it for the enjoyment;
Keep your amateur status and build parts provided by others.
Contribute, start, or help with some of the "Teen Flight" programs.
Volunteer locally for builders assistance.

You would qualify as one of the 51%'rs but you would not be the manufacturer.

If you want to get paid for your time..... that takes very careful navigation of the rules and there is no complete escape from liability, regardless of whether you're an LLC or not....

Not a bad idea to research with an attorney on what an LLC is, the protections it provides, and more importantly, what it does not provide. I carry liability insurance on my LLC's, and a general umbrella on me personally. This is an entire discussion on its own that has been had here before.

[clutch22]

So how about the people that say "I'd like to build my own airplane." They build it 100% themselves, then sell it for whatever made up reason. Then after that, they "regret" selling that plane, so they build another one. Same story, they sell it in the end, and the cycle goes on.

I'm not saying this is right or wrong. I know (or at least think) people use this method as a good source of income. I'm just wondering what the legalities are on this method. Is it all good?

[JonJay]

Originally Posted by clutch22

So how about the people that say "I'd like to build my own airplane." They build it 100% themselves, then sell it for whatever made up reason. Then after that, they "regret" selling that plane, so they build another one. Same story, they sell it in the end, and the cycle goes on.

I'm not saying this is right or wrong. I know (or at least think) people use this method as a good source of income. I'm just wondering what the legalities are on this method. Is it all good?

Absolutely all good. However, I would have to see what your definition of "good source of income" is.
Most airplanes are sold at, or often, below the cost of the parts, let alone any labor.

Keep in mind, they are now the manufacturer of the airplane and could be exposing themselves to more liability as such....

[sprucemoose]

Originally Posted by clutch22

Is it all good?

Absolutely not. Every time someone plays fast and loose with the regs, it jeapordizes the freedom that the rest of us enjoy under the E-AB rules.

Don't poke the bear. http://www.vansairforce.net/articles/PokingTheBear.pdf

[BobTurner]

Originally Posted by clutch22

So how about the people that say "I'd like to build my own airplane." They build it 100% themselves, then sell it for whatever made up reason. Then after that, they "regret" selling that plane, so they build another one. Same story, they sell it in the end, and the cycle goes on.

I'm not saying this is right or wrong. I know (or at least think) people use this method as a good source of income. I'm just wondering what the legalities are on this method. Is it all good?

The FARs call for an "intent": building is only allowed for a person's enjoyment or education. "Intent" can be difficult to prove or disprove in court, leaving some to take liberties and the FAA reluctant to prosecute a case they may lose.

[JonJay]

Originally Posted by sprucemoose

Absolutely not. Every time someone plays fast and loose with the regs, it jeapordizes the freedom that the rest of us enjoy under the E-AB rules.

Don't poke the bear. http://www.vansairforce.net/articles/PokingTheBear.pdf

Sorry, I was still in the "build for enjoyment" mode. I don't disagree.

[rjhecker]

Thank you all for the comments, life at the fire station has finally calmed down and I was totally excited to read all the responses. I have owned two LLC's and understand the liability and coverage they provide and don't provide. Also, the suggestions of keepin building enjoyable is something to be very aware of

I'll be checking with the local FSDO later this week to see where the 51% rule comes into effect in a situation like this. I'm assuming if I invoice the plane owner I would be considered a commercial builder, unless a few cases of beer show up in my shop

Thanks again for all of you that responded, I'll keep you updated.

-Rob

[DanH]

Originally Posted by rjhecker

I'll be checking with the local FSDO later this week to see where the 51% rule comes into effect in a situation like this.

Bwahahahahahaha!

Sorry, couldn't help it. Many would argue that asking five FSDO's will net five different interpretations.

You're a little early anyway. A better plan might involve developing build skills beyond finishing a prepunched cleco-together tail kit, then worry about turning pro.

[kamikaze]

Originally Posted by BobTurner

The FARs call for an "intent": building is only allowed for a person's enjoyment or education. "Intent" can be difficult to prove or disprove in court, leaving some to take liberties and the FAA reluctant to prosecute a case they may lose.

Neither enjoyment nor education preclude building and selling serially ... ? I enjoy building! So I build, sell, and do it again ... for enjoyment!

Same with education ... I learned, I sell, I want to learn some more!

[kinger]

Originally Posted by DanH

Bwahahahahahaha!

Sorry, couldn't help it. Many would argue that asking five FSDO's will net five different interpretations.

Dan, you must mean Six.....