turbo

turbo

Well Known Member
can a experimental be registered as a llc as the builder. was in discussion with a friend about this. I didn't think so. :confused:
 
turbo said:
can a experimental be registered as a llc as the builder. was in discussion with a friend about this. I didn't think so. :confused:
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Just yesterday a friend got his sign-off with the FAA for his Carbon Cub. I guess that's the way many of the Carbon Cub guys do it. The FAA guy wanted documentation of the LLC to show that there was only one member, the builder.

I guess doing that also gets the owner out of paying sales tax in our state, and shields the personal assets of the builder in the case of an accident.
 
BlackhawkSP said:
I guess doing that also gets the owner out of paying sales tax in our state, and shields the personal assets of the builder in the case of an accident.
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Nope. LLCs are pass-through entities for taxes and liabilities. All the LLC is really good for is hiding the personal information of the actual owners. Which is useful.
 
FlyingDiver said:
Nope. LLCs are pass-through entities for taxes and liabilities. All the LLC is really good for is hiding the personal information of the actual owners. Which is useful.
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... but the PI can be found by lawyer, tax search, LLC articles of incorporation filed with state, etc ... even if one uses a registered agent. I really wanted to go this route, but just can't find a solid use for it in the experimental world. All that said, many do it.

To my knowledge, the certificated folks do this as a legal way to lease the airplane back to themselves during operations.

If anyone else can provide more/better info, I'm all ears too...
 
BlackhawkSP said:
Just yesterday a friend got his sign-off with the FAA for his Carbon Cub. I guess that's the way many of the Carbon Cub guys do it. The FAA guy wanted documentation of the LLC to show that there was only one member, the builder.

I guess doing that also gets the owner out of paying sales tax in our state, and shields the personal assets of the builder in the case of an accident.
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That's not how an LLC works. The LLC (which if it is a single member would be the owner) has to pay those taxes. They still get paid, just through a different checking account. Also, an LLC will do very little to shield personal assets from personal liability.

That said, there may be very good reasons to put an airplane in an LLC. But those aren't the reasons.
 
ownership

I was going to do this to hide my personal information from the FAA database. Turns out there are only a few states where the LLC details are hidden from discovery by the public. So I would have to get a mail box one of those states, incorporate an LLC in that state, then register the plane with that LLC.

I didnt do that, so now I hope my name is so common that it would be confusing which RV being tracked is me.
 
We have two members in a LLC for an experimental. The LLC does nothing to shield the aircraft from taxes. Where the aircraft is based state and local taxes will be due.
 
FlyingDiver said:
Nope. LLCs are pass-through entities for taxes and liabilities. All the LLC is really good for is hiding the personal information of the actual owners. Which is useful.
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Not entirely. IANAL, but the LL means "Limited Liability", and an LLC *can* shield an LLC member from some liability if another member is flying the plane and has an accident. And LLCs can have different taxes and fees, as well, from my understanding.

BUT, as I've said before, there are 3 things I never rely on internet "advice" regarding:

Taxes
Legal issues
Health and medicine

You should talk to a knowledgeable aviation attorney and accountant, not get your advice from the intertubes.
 
Perhaps a DAR can jump in here, but I believe that some of these comments have gotten lost between the definitions of "builder" and "owner"

I've never seen seen an EAB with anything other than an individual listed as the builder, but I'm certainly not the expert in that arena.

On the other hand tons of airplanes are registered with an LLC as owner. It doesn't seem to do much from a liability protection standpoint, but one big benefit that nobody has mentioned is that you can transfer ownership very simply by just selling the LLC.
 
Probably a good topic for Mel to help out with.

My belief is that the Manufacturer on the data plate need be an individual. And that would also be the individual with the repairman's certificate.

It would be rather odd to have that be an LLC, since there is no legal restriction (anywhere in the law) to keep a Single Member LLC from adding members. The member list is an annual filing with the state and can be increased/decreased every year as needed. That wouldn't be to cool for tracking the Manufacturer of an E-AB.

My plane is owned by my LLC (for may reasons of my own) but that is a registration question, not a manufacturer question, and I didn't build it so the data plate shows the talented guys name and he still holds the reparimans certificate since I'm unable to hold it. (And because I'm mechanically inept, so most all maintenance is done by an A&P)
 
This should clear things up.
A builder can be an LLC.
Advisory circular states you must name a person as the builder.
The FAR’s Part 1 definitions define a person as follows
“ Person means an individual, firm, partnership, corporation, company, association, joint-stock association, or governmental entity. It includes a trustee, receiver, assignee, or similar representative of any of them.”
My Data plate and airworthiness certificate for my RV7 both list the builder as an LLC.
 
Plenty of LLC "builders". It's not something I'm crazy about, but I don't make the rules.

This is determined at the registration level. Once the aircraft is registered, all of our paperwork MUST match the registration.

Even though the manufacturer may be listed as an LLC, the 8130-12 must list individual persons as builders.
 
rolivi said:
Probably a good topic for Mel to help out with.

My belief is that the Manufacturer on the data plate need be an individual. And that would also be the individual with the repairman's certificate.
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As Mel answered, above, this is incorrect. The repairman certificate holder must be one, but only one, of the persons named on the 8130-12..
 
Agree

RV7A Flyer said:
Not entirely. IANAL, but the LL means "Limited Liability", and an LLC *can* shield an LLC member from some liability if another member is flying the plane and has an accident. And LLCs can have different taxes and fees, as well, from my understanding.

BUT, as I've said before, there are 3 things I never rely on internet "advice" regarding:

Taxes
Legal issues
Health and medicine

You should talk to a knowledgeable aviation attorney and accountant, not get your advice from the intertubes.
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All above is accurate but I might add a LLC can give you some added layer of liability protection, but it is not a get out of jail free card. A court order would be required to "pierce the so called vail" but could and would be done if the situation allowed such as gross negligence. It is a pass-through entity, so all taxes and other costs need to be paid by the entity's owners. It is a good way to depreciate the aircraft if used for business purposes. It also can be used to shield financial liabilities in certain situations. (Gross negligence not one of these)

As others have said get real advice from an attorney and not from the internet.
 
I have my RV10 (which I constructed) in an LLC with two members. The data plate reflects the LLC name. In Missouri, all out of state purchases cumulative over $2000 (not taxed locally) must be reported and tax paid each year, but at a much lower rate.
 
Internet legal advice

Vansairforce needs a "lawyer doing a facepalm" emoji.

dmattmul said:
All above is accurate but I might add a LLC can give you some added layer of liability protection, but it is not a get out of jail free card. A court order would be required to "pierce the so called vail" but could and would be done if the situation allowed such as gross negligence. It is a pass-through entity, so all taxes and other costs need to be paid by the entity's owners. It is a good way to depreciate the aircraft if used for business purposes. It also can be used to shield financial liabilities in certain situations. (Gross negligence not one of these)

As others have said get real advice from an attorney and not from the internet.
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spstout said:
That's not how an LLC works. The LLC (which if it is a single member would be the owner) has to pay those taxes. They still get paid, just through a different checking account. Also, an LLC will do very little to shield personal assets from personal liability.

That said, there may be very good reasons to put an airplane in an LLC. But those aren't the reasons.
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But from above:
"To my knowledge, the certificated folks do this as a legal way to lease the airplane back to themselves during operations."

This is exactly what my friend is doing with his plane. He leases the plane back to himself and only pays taxes on the monthly amount of the lease, instead of the 15K sales tax he would have had to pay.
 
FlyingDiver said:
Nope. LLCs are pass-through entities for taxes and liabilities. All the LLC is really good for is hiding the personal information of the actual owners. Which is useful.
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Soooo... A Limited Liability Corporation... doesn't limit the lability of the owner (s) of the company? I'm not versed in legalese, but the name implies that it does shield the owners from flow thru of lability????
 
Warp10 said:
Soooo... A Limited Liability Corporation... doesn't limit the lability of the owner (s) of the company? I'm not versed in legalese, but the name implies that it does shield the owners from flow thru of lability????
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The corporation has limited liability. The owners do not.
 
Please everyone read this

It's physically painful reading some of the bizarre legal opinions in this thread.

Here's a pretty good summary of how this all works:

https://pilot-protection-services.a...-companies-offer-limited-liability-protection

I'd add to this that BUILDING a plane negligently, just like FLYING a plane negligently, might generate individual liability, and the fact that an LLC owns or owned the airplane likely won't help.

I am not your lawyer, and you would be crazy to take my advice, but you would be even crazier to take some of the advice given by others in this thread. :D
 
FlyingDiver said:
Nope. LLCs are pass-through entities for taxes and liabilities. All the LLC is really good for is hiding the personal information of the actual owners. Which is useful.
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Yeah...my CFI used to be my CPA, tax accountant, and accountant for my business before he retired to being a flight instructor. We discussed all of this a lot when I was buying my current airplane. Ain't no free lunch, he assures me.
 
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