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Partnership structure

ksauce

Well Known Member
Patron
Hi All,

My friend and I are approaching the point of buying an RV together. I've found several articles about setting up flying clubs but there's very little I can find on a partnership, let alone one that's EAB.

I'm mostly curious about how financing might work. How do we get a loan as two individuals? Does one of us get the loan and the other just pay half each month?

I'm also debating the legal structure. I don't know much about the ins and outs of the various options. I can barely spell LLC.

I suppose these may be better questions of a CPA/attorney, but I wanted to start here given the vast wealth of knowledge.

Thanks in advance,
Kev
 
In our partnership we have an LLC. Each of us pays a set amount each month that covers fixed costs which are the insurance and hangar. We have a wet rate that covers variable and semi-variable costs plus extra into a maintenance fund. For financing I would guess each of you would get a loan for your share of the plane but that may be a question for someone else to answer more acurately. AOPA and possibly EAA have sample partnership agreements so they are a good rescource for the documentation.
 
Partnerships

I have been in several partnerships. Besides the paperwork.
Make sure you like the person and trust them to do the right thing.
Be willing to pay more than what you think is your share.
And have an agreed upon exit strategy.
I have enjoyed every partnership in airplanes I have been in.
 
I will echo what Mike said above. I am in the process of taking on a co-owner in my RV-12. We're forming an LLC so there will be minimal hassle in transferring ownership, adding or subtracting additional owners, etc. should we decide to do so. The airplane will always be the LLC's property; the ownership of the LLC can change as we wish. So you're not buying part of an airplane, you're buying into an LLC that owns an airplane, or maybe more than one at some point. It gives you a lot of flexibility. As for financing, each of us makes our own arrangements for what we use to buy our portion of the LLC. That means no lien on the airplane.

We have an operating agreement that defines how we have agreed to operate, maintain and pay for the care and feeding of the airplane - as well as an exit strategy, how to deal with upgrades, repairs, disagreements and non-paying owners, all of that stuff. Most of that came from a couple of operating agreements I found on line, modified to suit us and fine tuned by the attorney setting up our LLC. Right now we're just using text messages and bookourplane.com to coordinate. We're looking for a better solution for tracking hours that doesn't cost as much as, say, Flight Schedule Pro. For now it's a sheet of paper.

This is all new to my co-owner. I was a flying club member before, and I was on the board, so I got to see how a well run operation works. That helped a lot. It will be nice to only have to pay half of the fixed costs, and see the plane flown more regularly.
 
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