LLCs and liability
Please explain further then. I haven't been to law school and always ready to learn something new. I only know what I know based on running my own LLC over the past 10 or so years and it's real estate based, so nothing related to airplanes..
Happy to - and I hope I didn't come off as snarky (I suspect I could learn quite a lot from you about real estate....)
First, the mandatory disclaimer:
THE FOLLOWING DISCUSSION IS HYPOTHETICAL ONLY. THIS IS NOT LEGAL ADVICE. NOBODY ANYWHERE IS MY CLIENT, NOR AM I HIS OR HER LAWYER. I HAVE NO IDEA WHAT I AM TALKING ABOUT AND NOBODY SHOULD RELY ON ANYTHING I SAY. IN FACT I AM ABSOLUTELY CERTIFIABLY INSANE, AS DEMONSTRATED BY THE FACT THAT I FLY ONE OF THOESE "LITTLE AIRPLANES." YOUR JURISDICTION'S LAW MAY VERY WELL DIFFER QUITE A BIT FROM THE FOLLOWING. AND IN ANY EVENT THE FOLLOWING IS TOTALLY WRONG AND UTTERLY UNRELIABLE.
As several people have mentioned, it's basically impossible for an LLC or other corporate structure to shield *the person who is actually flying the aircraft* against personal liability for a crash. His or her personal assets and/or insurance will very, very likely be on the line.
It's important to remember that pilots can be held liable for negligence as well as for reckless or intentional conduct -- so whether there have been "bad acts" isn't really the test. Gross negligence, recklessness, or intentional bad acts are worse, of course, and so they may permit the court to assess punitive as well as compensatory damages. That sort of thing varies a lot by state.
Other members of the LLC, who weren't flying, may (emphasize MAY) be able to use the aircraft-owning LLC or corporation to shield their personal assets. Much like you aren't personally on the hook as a Boeing shareholder if Boeing gets sued after a crash. True, your Boeing stock might get reduced to $0 value, but they can't get your bank account.
But the facts will matter. Keep in mind that LLC members can be very different from Boeing shareholders. Maybe one of those other LLC members, who hopes to use the LLC as a shield.... negligently repaired the aircraft, possibly causing the crash? Maybe one of them built the aircraft, and is liable for its defective construction? In circumstances like that, they could be personally liable just like the pilot.
From what I can tell, owning an aircraft via an LLC can be useful when there are multiple individuals owning the plane, where you want the ability to easily enter and exit the ownership structure, and where you want to limit your liabiliy, as much as possible, for actions of OTHER members. I don't see much of a way to use an LLC to limit one's own liability, or to avoid sales/use/property taxes in the state in which the aircraft is actually based.