Anything tricky registering my plane into LLC?

[NJMac]

I recall faintly a few years back someone saying there was a quirck with the FAA and a technicality that got someone's LLC plane registration kicked back a number of times before they caught on to the exact format they wanted. Anyone familiar with that?
 
I'm not really expecting any legal protection from this. I own a home service, customer facing business with 6000+ customers locally and while I keep a low profile as the owner, i dont need someone falling into my registration when they google my name. Thought using one of my dumb LLCs would solve this.
 
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[Davidv]

I’m not sure about why it was kicked back but I recently created an LLC to buy my plane and then had the title company handling the sale register the plane with no issues.  Although my knowledge is limited, I think this would be more an issue of who fills out the FAA paperwork than the LLC process.  In my case it was done by people who do hundreds of registrations per year (and pretty reasonable at $400 split between buyer and seller) so that probably helped.

[BradB]

You need a letter that provides a statement of support for the LLC to register the plane.  It is rather strange.  I can PM you the one that I used.

 

Brad

 

Edited March 24, 2019 by BradB

[NJMac]

You need a letter that provides a statement of support for the LLC to register the plane.  It is rather strange.  I can PM you the one that I used.
 
Brad
 

Thanks Brad. I'll message you now

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[LANCECASPER]

When you sign the FAA registration when you use an LLC your title is "member". Mine got kicked out once because I didn't use that.

[NJMac]

When you sign the FAA registration when you use an LLC your title is "member". Mine got kicked out once because I didn't use that.

I sign all my legal documents that way. Own all of them solely but have had people ask who other members are. Single member LLC still just a member. Thanks Lance.

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[bill98]

My address change I submitted (in january) got kicked back to me asking that I draw a single line through what ever I had put down and instead write in “member”. I’ll probably find  out if it was successful in November knowing the pace of the FAA

[mark21m20c]

kicked back for putting member . Needed to put manager. Drew a line thru member and added manager and sent back to Reg office.

[midlifeflyer]

Those last posts are funny read together. I think I can guess what happened in both cases if it wasn't some fool at the FAA (a possibility).  Likely a discrepancy between the signer's title used on the application and the one on the supporting LLC document or, in the case of renewal or change notices, the one used in the original application.  The FAA doesn't care if you use "Member," "Manager," "CEO," or "Grand Poohbah" so long as it is supported. 

Edited April 2, 2019 by midlifeflyer

[tony]

That's takes you out of part 91 and puts you into part 135.  You sure you want to do that?

[NJMac]

That's takes you out of part 91 and puts you into part 135.  You sure you want to do that?

Wait. Simply having the LLC own the plane changes from 91 to 135? Serious?

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[Austintatious]

1 hour ago, NJMac said:

Wait. Simply having the LLC own the plane changes from 91 to 135? Serious?

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DISCLAIMER: What I am about to say is all from extensive research online not working experience.

The FAA has construed it that way.   You have to be very very careful with an aircraft under an LLC. 

For starters, you have to keep meticulous records for the LLC if you want to actually involve it in your tax returns in any way.  If you get audited they will want to see that you are legitimately using the aircraft for business purposes.  If the aircraft is just for your personal recreation the Hobby loss rule comes into play and there is no tax benefit.

Next, you will have to draw up a DRY LEASE agreement from the LLC to you as an individual.  If you don't do this, then on paper it looks like an LLC owning an aircraft is charging YOU (as an individual) to be flown around... that is a 135 operation in the FAA's eyes. ( don't they love to make work for themselves?).   Now, you have another problem on the insurance side in that you have to make sure your insurance allows you to dry lease the aircraft.  If you have a lender on the aircraft they must also allow it.

 

Ultimately I decided the anonymity was not worth it.  Not much someone can do with my name.

Edited April 4, 2019 by Austintatious

[NJMac]

DISCLAIMER: What I am about to say is all from extensive research online not working experience.
The FAA has construed it that way.   You have to be very very careful with an aircraft under an LLC. 
For starters, you have to keep meticulous records for the LLC if you want to actually involve it in your tax returns in any way.  If you get audited they will want to see that you are legitimately using the aircraft for business purposes.  If the aircraft is just for your personal recreation the Hobby loss rule comes into play and there is no tax benefit.
Next, you will have to draw up a DRY LEASE agreement from the LLC to you as an individual.  If you don't do this, then on paper it looks like an LLC owning an aircraft is charging YOU (as an individual) to be flown around... that is a 135 operation in the FAA's eyes. ( don't they love to make work for themselves?).   Now, you have another problem on the insurance side in that you have to make sure your insurance allows you to dry lease the aircraft.  If you have a lender on the aircraft they must also allow it.
 
Ultimately I decided the anonymity was not worth it.  Not much someone can do with my name.

How does all of that work out if there's no money involved? I wasn't planning on doing a lease or anything. The plane is owned outright so I was just going to effectively re-title or technically re-register it to the LLC

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[Austintatious]

6 hours ago, NJMac said:

How does all of that work out if there's no money involved? I wasn't planning on doing a lease or anything. The plane is owned outright so I was just going to effectively re-title or technically re-register it to the LLC

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I do not know exactly.

since I will have a partner, money being involved was neccessary (maint reserves, payments ect).

you just have to be careful about how you do things on paper. 

It would definitely be worth consulting an expert on the matter if you really want to have the acft in an llc.  I bailed on the whole idea given the intricacies.

You can get away with anything until someone (FAA or IRS) starts to scrutinize what you are doing.  for me and my partner, since there was no tax advantage, we decided to just keep it simple.

Just keep in mind that the LLC is its own entity.  when it comes to airplanes, money is always involved.  Who is paying the hangar fees? The maintenance?  is it YOU the individual?  is it the LLC? Or is it Coming from you via Capitol contributions to The LLC?

I simply didnt want to be responsible for documenting all that.

 

PS:  If you have the aircraft in an LLC... I have heard the county can attempt to tax you on it, similar to what they do for office furniture.

Edited April 4, 2019 by Austintatious