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BryanArd

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I am thinking about forming an LLC so I can show that it is the owner of my -6 project. This is for liability reasons, as I might sell it it the future.

My question is...If the LLC is listed as the manufacturer, can I still apply for and receive the repairman certificate?

This has nothing to do with the current debate on the 51% rule, as I can assure everyone that I am building it (-6 slow build kit)!
 
Hi Bryan,

Sorry to be the bearer of bad news.....The LLC CAN'T be listed as the mfgr (nor can any corporation). It has to be a person.

Plus, some of the legal types around here will tell you about the long term success of creating an LLC / Corp solely for the purpose of shielding yourself from liability. Not as cut and dried as you might think, even if it were possible.

The LLC can own the airplane, but it can't be the mfgr.

Cheers,
Stein
 
An LLC will not shield you as the builder

Bryan,
I do not think that having your aircraft owned by an LLC will help you in the liability department. As an aircraft builder, you have a duty to construct your aircraft in a reasonably safe manner. You would be deemed "negligent" if you fell below a standard of care and construction which would be expected of a reasonably prudent and careful builder in the same or similar circumstances. In addition, as a "manufacturer", you would be strictly liable for any injuries which occurred as a result of your product (the aircraft) having a "defect". Even if you called a corporation or LLC the "manufacturer", you would still be the de facto manufacturer of the aircraft.

All is not lost, however. You can limit your potential liability by informing any purchaser of the limitations of your construction and the risks inherent in flying an amateur built aircraft. This is called "assumption of the risk". In addition, lawsuits against home builders are very rare. There is no real need to worry about it. Just build it and enjoy it. If you ever sell it, simply disclose everything about its construction, give appropriate warnings to the purchaser and go on with your life.
 
Thanks for the reply, Steve. I'm going to keep things simple and not worry about the LLC. The kids will probably wind up with the plane anyway! :)

Stein, can you PM me a quote on a wiring harness? AFS-3500/engine monitor, Garmin 430, TruTrak A/P, and audio panel, plus the normal assortment of switches for lights, fuel pump, etc. :D
 
Bryan, From what I understand, you can set up the appropriate entity trust to protect your a$$-ets. I am not a lawyer so I could not give you advice on the appropriate entity, but there are options.

You can write waivers/disclosures all you want if you ever sell the plane. The moment someone who did not sign the waiver is involved (pax or spouse/dependents) in an incident, the manufacturer/builder will come into play.

Steve hit it right on, go build it and have fun.

Ryan
 
Early demise?

Interesting discussion. Let me throw in another scenerio. What if the airplane that I built fails while I am flying it, i.e. I still own it. In the process the airplane crashes and kills not only me, but someone on the ground. Or maybe I have a passenger that gets killed.

In this scenerio, can someone sue my wife's assets? Her assets before my untimely demise were "ours", but now they are "hers".

Or, what if I survive the crash, and someone else dies as a result. Can they sue "us" for "our" assets?

This is a good discussion, and I am glad that I am not the only person that thinks about these things.
 
One word...

Alan Gilmore said:
Interesting discussion. Let me throw in another scenerio. What if the airplane that I built fails while I am flying it, i.e. I still own it. In the process the airplane crashes and kills not only me, but someone on the ground. Or maybe I have a passenger that gets killed.

In this scenerio, can someone sue my wife's assets? Her assets before my untimely demise were "ours", but now they are "hers".

Or, what if I survive the crash, and someone else dies as a result. Can they sue "us" for "our" assets?

This is a good discussion, and I am glad that I am not the only person that thinks about these things.
Click to expand...

The beginning of the answer to all of your points is insurance. Yes, someone could sue you for more than the coverage, but one of the joys of having a liability policy is that the insurance carrier will defend you (and their interests) in court. Personally, I feel that the $300 a year that I pay for the coverage ($1 million) is well worth it.

John Clark
RV8 N18U "Sunshine"
KSBA
 
varies

The answers to these questions vary from state to state. Different states have different rules. If you have a lot of assets and you're worried about this possibility, rule no. 1 is to see a lawyer.

As a lawyer, my advice would be to move to Texas (best state in the country to be a deadbeat or judgment debtor), or, even better, do the best you can and don't worry about it. If you have a lot of money, see rule no. 1.
 
 
Very interesting. Technically, it's not supposed to happen.

Curious that only one of those examples actually shows the airworthiness certificate data. Of course, we all know how accurate the FAA's database is...
 
You have to sign an affidavit that the aircraft was built by whomever you list as the manufacturer.

Your LLC did not build the airplane, you built the airplane.

More importantly, there is no "magic bullet" to creating a liability bulkhead. If the sole purpose of the corporation is to provide such a bulkhead, you better capitalize the corporation sufficiently to cover any liabilities that arise, and you better compensate the corporation for the use of the plane. Otherwise, it will be highly vulnerable to "piercing" (as in corporate veil), if and when you have a problem.

In short, in order to be treated like a corporation or other entity, and in many states LLC's have statutory treatment very similar to partnerships, you must act in all regards as if the plane was built and owned by the LLC.

Talk to an experienced lawyer, who has formed these entities and litigated these issues...such a lawyer will not be offering a $500 formation fee. When you do it will become clear that this offers little if any protection in the even that you have done something wrong.
 
I recently found some information that addresses this issue (whether to form an LLC) directly. I will copy my email to a fellow VAF member verbatim rather than trying to retype it:

Okay, here is what I?ve found out? This is from an aviation attorney whose name escapes me right now. Rex Reese or something like that.

Most guys who are titling the plane under an LLC or corporation for the purpose of mitigating liability are actually doing themselves a huge disservice and might be increasing their liability. The reason is that when a company owns and operates an airplane, it is acting as a ?corporate flight department? (or something like that) under the FARs. A corporate flight department generally operates under the loose requirements of Part 91 when it is operating the aircraft for its own business purposes. One requirement of Part 91 is that the flight department not be compensated for flights by passengers.

When you form an LLC and inject capital into it (for maintenance, hangar fees, operating expenses, insurance, etc.), the FAA considers that compensation. The LLC is essentially acting as a charter or on-demand operator and both the pilot and the aircraft are subject to Part 135. That means commercial pilot?s license, flight time restrictions and more vigorous inspections, not to mention that a homebuilt can?t be operated under part 135 (I don?t think). It doesn?t matter that you, acting as the company ?owner? are the only one in the plane. You, acting as the company pilot, are carrying yourself as a paying passenger (remember that you and the company are separate legal entities). If you aren?t operating under Part 135, you are operating illegally and in a manner that is de facto negligent. If you wreck and hurt someone, this fact makes a plaintiff?s case that much more airtight.

A seemingly plausible workaround is to have the LLC lease the airplane to you, personally, as the operator. But then you?ve lost the protection you sought by forming the LLC, so it?s pointless.

Hope this makes sense. This is definitely a question for an aviation attorney & I ain?t one?
 
Repairman certificate and LLC?

If a builder completes a plane and decides to put it in an LLC, who holds the repairman certificate? The individual or the LLC? Or will the LLC need to hire an A & P since it is a new owner and not the original builder?
 
Look at your liability when you fly, and ask yourself how the LLC will protect you.
1. You're flying and you crash, pilot error. Was the LLC flying the plane?
2. You're flying and you crash, mechanical problem. Is the pilot or the LLC responsible to ensure that the aircraft is in an airworthy condition?
3. You're flying and the wings fall off because you forgot to torque the bolts. Did the LLC build the plane or did you?
4. You sell the plane, new owner is flying and the wings fall off because you didn't torque the bolts. Was the LLC supposed to torque the bolts or were you?
5. Someone slips on your sidewalk and wins a $10 million judgement against you. They may get your house, your car, and your future earnings, but your plane will be out of reach in the LLC. So if you are at risk of being sued for something other than operating your plane, putting it in an LLC makes a lot of sense.
The point is, shifting ownership to an LLC does little to take away your personal liability of building and piloting your plane IMHO.
 
DCalland said:
If a builder completes a plane and decides to put it in an LLC, who holds the repairman certificate? The individual or the LLC? Or will the LLC need to hire an A & P since it is a new owner and not the original builder?
Click to expand...
Repairman certificate must be held by an individual, NOT an LLC.
 
Using a trust?

I have seen a plane registered to a "Trust" and the pilot is then the "trustee." I don't know what benefit or problems that could create. I didn't ask, but I know the guy wasn't hurting for money.
 
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