LLC vs individual registration

[EricJ]

20 hours ago, N201MKTurbo said:

Thanks for the advice!

It is a North Dakota LLC. Would I get the dissolution documents from ND or are they generic? What about the asset transfer document?

Paying th $50 a year seems cheaper than an attorney.    

Find out what forms and process are involved in ND, as it is specific to them.

I'm just in the process of this for the AZ LLC that owned our mine.   AZ makes LLCs nearly trivial, including dissolution.   Not sure what ND is like, but one of the reasons we used AZ for the mine was that SD had a lot more hoops to jump through and expenses involved.

[201Steve]

I’ve heard of people using LLC so they can sell the airplane by way of selling the LLC instead of the a/c and therefore, offering incentive to the new buyer that there will be no registration change and depending on your local situation, no sales tax. The biggest disadvantage to this is making sure that the LLC (the airplane) does not have any debt associated with it, which is difficult  to confirm absolutely. You buy the LLC and you buy the LLC’s debt, if any. 

[KLRDMD]

On 7/12/2019 at 8:40 AM, smwash02 said:

From a day to day flying perspective I've only come across two situations where this mattered.

Flying to Mexico if you have it company owned you will need to write a letter on 'company letterhead' that is notarized stating you are allowed the fly the plane

It doesn't have to be on company letterhead but it must be notarized. I have letter from two LLCs allowing me to fly the plane to Mexico and neither are on letterhead and Mexico has never had an issue.

[N201MKTurbo]

2 hours ago, EricJ said:

Find out what forms and process are involved in ND, as it is specific to them.

I'm just in the process of this for the AZ LLC that owned our mine.   AZ makes LLCs nearly trivial, including dissolution.   Not sure what ND is like, but one of the reasons we used AZ for the mine was that SD had a lot more hoops to jump through and expenses involved.

My ex partner was from ND. That’s how it ended up there. My insurance agent is in Fargo and acts as my LLC agent for nothing.

I might as well give him a plug.

Northstar Aircraft Insurance

He gets me screaming deals on Insurance!

[chrixxer]

Easier paperwork, across the board. Hangar in the name of the LLC; want to add a gate card? That person is now a 0.01% member of the LLC. Add a partner? Transfer a membership interest in the LLC. Sell the plane? Just sell all your interest in the LLC. Etc.

Keeps bookkeeping simpler.

Layer of obfuscation vis-a-vis public records.

Everyone I know with a plane has it in a corp or LLC. YMMV.


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[Rwsavory]

3 hours ago, 201Steve said:

I’ve heard of people using LLC so they can sell the airplane by way of selling the LLC instead of the a/c and therefore, offering incentive to the new buyer that there will be no registration change and depending on your local situation, no sales tax. The biggest disadvantage to this is making sure that the LLC (the airplane) does not have any debt associated with it, which is difficult  to confirm absolutely. You buy the LLC and you buy the LLC’s debt, if any. 

So if you buy the LLC you would need to perform two levels of due diligence: One for the plane and another for the LLC.  Lots of traps there.  I have a lot of experience with LLC’s and would never consider it.  

[RobertGary1]

1 hour ago, chrixxer said:

Everyone I know with a plane has it in a corp or LLC. YMMV.


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You must be in a state where it’s cheap. It’s not worth $800/yr in California. 

-Robert 

[Austintatious]

I bought my aircraft with a partner... After extensive research I deemed using an LLC a hassle not worth doing.

 

Basically no advantages.  Easy veil to pierce liability wise, all the lawyers have to do is prove it was a pointless shell which is easy if you are not keeping records and actually using the business for the intent to make profit.   You must keep meticulous paperwork if you intend to get any tax benefit and if you arent actually using it for business purposes it is impossible to do so.

 

Changing registration with the FAA is no big deal.  I had a partner in a glider and bought him out.  So basically the BOS appeared to be me and him selling the aircraft to me.  No big deal.

[RobertGary1]

7 minutes ago, Austintatious said:

 

Changing registration with the FAA is no big deal.  I had a partner in a glider and bought him out.  So basically the BOS appeared to be me and him selling the aircraft to me.  No big deal.

It’s just the cost of having to pay the sales tax each time you change partners. Using an LLC can illegally hide that. 

-Robert 

[Austintatious]

14 minutes ago, RobertGary1 said:

It’s just the cost of having to pay the sales tax each time you change partners. Using an LLC can illegally hide that. 

-Robert 

if you are doing it more than once a year then yes.  A lot of states have exemptions for occasional sales. 

[chrixxer]

1 hour ago, RobertGary1 said:

You must be in a state where it’s cheap. It’s not worth $800/yr in California. 

-Robert 

I'm in California.

[RobertGary1]

13 minutes ago, chrixxer said:

I'm in California.

$800/yr state franchise fee for having an llc or Corp that has presence in California buys a lot of 100LL

-Robert