part owner

Greetings:
I am considering part ownership/partnership. I would greatly appreciate any
comments, suggestions, recommendations before I make my decision. What
things have some of you learned from your experiences. Thank you. Brian

I am in a partnership with one other person... So far it has really
worked out well. I didn't know this guy from Adam before we purchased
our Mooney but am getting to know him now. We talked a lot before buying
and we both have the same feelings as far as maintenance and spending
money goes. We set up a Limited Liability Corporation to cover us in
case of an accident and then set up a joint checking and savings
account. We have an online calendar set up for reserving the airplane
but we don't really use it. It seems that calling one another is easier.
So far no conflicts. We are both flying more than we did as renters and
enjoying our Mooney very much.

Other than unexpected maintenance items, ownership has been very
enjoyable. I know there are some horror stories out there as far as
partnerships go but mine is not one of them. Good luck in your search.
The theory in a partnership is that you can get into an aircraft that
alone would have been impossible. You can email me if you have other
questions.

Jon Kraus
PP-ASEL-IA
Student Mooney Owner

Anti-Death-Spec wrote:

Greetings:
I am considering part ownership/partnership. I would greatly appreciate any
comments, suggestions, recommendations before I make my decision. What
things have some of you learned from your experiences. Thank you. Brian

Jon Kraus wrote:
I am in a partnership with one other person... So far it has really
worked out well. I didn't know this guy from Adam before we purchased

our Mooney but am getting to know him now. We talked a lot before
buying
and we both have the same feelings as far as maintenance and spending

money goes. We set up a Limited Liability Corporation to cover us in
case of an accident and then set up a joint checking and savings
account. We have an online calendar set up for reserving the airplane

but we don't really use it. It seems that calling one another is
easier.
So far no conflicts. We are both flying more than we did as renters
and
enjoying our Mooney very much.


I am also in a partnership in my Mooney. My main reason for getting a
partner was to ensure we got 150-200 hours per year. Anything less is
abusive to the plane. The partnership has been fantatic because we
agree on maintenance and have similar views on the operations.
One word of caution. Be vary careful about setting up corporations or
LLCs. Many states have pretty high minimum annual taxes for these
things. In California, all LLCs and Corp must pay at least $800/yr in
franchise tax. There is a way out of this (prove you are a non-profit
"club"), which is what we did. However, it took a lot of time and in
the end we presented almost 40 pages of documentation to get it. It's
not for the light-hearted.

-Robert

As far as I know Indiana does not have annual fees for being in LLC. My
partner had previously checked into this as he has set up multiple LLC
for other busines ventures he is in. Thanks for the advise though...

Jon Kraus
PP-ASEL-IA
Student Mooney Owner

Robert M. Gary wrote:
Jon Kraus wrote:

I am in a partnership with one other person... So far it has really
worked out well. I didn't know this guy from Adam before we purchased


our Mooney but am getting to know him now. We talked a lot before

buying

and we both have the same feelings as far as maintenance and spending


money goes. We set up a Limited Liability Corporation to cover us in
case of an accident and then set up a joint checking and savings
account. We have an online calendar set up for reserving the airplane


but we don't really use it. It seems that calling one another is

easier.

So far no conflicts. We are both flying more than we did as renters

and

enjoying our Mooney very much.



I am also in a partnership in my Mooney. My main reason for getting a
partner was to ensure we got 150-200 hours per year. Anything less is
abusive to the plane. The partnership has been fantatic because we
agree on maintenance and have similar views on the operations.
One word of caution. Be vary careful about setting up corporations or
LLCs. Many states have pretty high minimum annual taxes for these
things. In California, all LLCs and Corp must pay at least $800/yr in
franchise tax. There is a way out of this (prove you are a non-profit
"club"), which is what we did. However, it took a lot of time and in
the end we presented almost 40 pages of documentation to get it. It's
not for the light-hearted.

-Robert

"Jon Kraus" wrote:
We set up a Limited Liability Corporation to cover us in
case of an accident....

What liability are you referring to? In the case of an accident, that
would be potential tort liability, in which case it is the pilot of
the aircraft who gets sued, not just the LLC.

Fred F.

TaxSrv wrote:
"Jon Kraus" wrote:
We set up a Limited Liability Corporation to cover us in
case of an accident....

What liability are you referring to? In the case of an accident,
that
would be potential tort liability, in which case it is the pilot of
the aircraft who gets sued, not just the LLC.

After my friend's accident, his partner was sued by one of the
passengers. His only connection to the accident was a part ownership in
the aircraft. The pax had lost wages well in excess of the insurance
limits.

-Robert

TaxSrv wrote:
"Jon Kraus" wrote:
We set up a Limited Liability Corporation to cover us in
case of an accident....

What liability are you referring to? In the case of an accident,
that
would be potential tort liability, in which case it is the pilot of
the aircraft who gets sued, not just the LLC.

After my friend's accident, his partner was sued by one of the
passengers. His only connection to the accident was a part ownership in
the aircraft. The pax had lost wages well in excess of the insurance
limits.

-Robert

"Robert M. Gary" wrote:
...
After my friend's accident, his partner was sued by one of the
passengers. His only connection to the accident was a part ownership
in
the aircraft. The pax had lost wages well in excess of the insurance
limits.

That sounds like the problem of co-ownership of the aircraft. The
contra to that is the situation where the same guy is a shareholder in
a corp or member of an LLC. It is true there that such person cannot
be named in a suit for alleged tort by another shareholder/member who
actually flew the airplane.

But when it comes to judgment time in a successful suit, and a partner
is not named as defendant, then that partner cannot be made to fork
over his interest. As a practical matter also, the plaintiff may not
seek dissolution of the partnership to obtain some more dough,
especially if there's a loan on the aircraft. However, if the
aircraft is owned by a corp or LLC, and both pilot and corp/LLC are
named in a successful suit, then the plaintiff automatically gets to
own all the assets of the corp or LLC, namely the aircraft, which
leaves the other guy bewilderingly "holding his schmeckle," without
even being sued! Potentially to lose either way, no?

Fred F.

"Anti-Death-Spec" wrote in message
news:aABEd.23119$sf5.16730@lakeread05...
Greetings:
I am considering part ownership/partnership. I would greatly appreciate
any comments, suggestions, recommendations before I make my decision. What
things have some of you learned from your experiences. Thank you. Brian

Esp for the beginner owner it is a good way to go. More eyes and ears to
notice things that need to be taken care of. And sharing expenses among
several pople for a resource that you may only use several days a month
makes a lot of sense. We have an online scheduling program and an online
account book.

AOPA has a sample partnership agreement on their web site, which you might
want to take a look at.

Anti-Death-Spec wrote:
Greetings:
I am considering part ownership/partnership. I would greatly appreciate any
comments, suggestions, recommendations before I make my decision. What
things have some of you learned from your experiences. Thank you. Brian

The ideal number of partners is 2 (including you). Three is acceptable. Any more
than that is in the region of diminishing returns.

2 is better than one, because you get some cost sharing, and because you can
increase the utilization of the airplane, thereby amortizing your fixed cost
over more hours.

When you go from 1 owner to 2, you cut your expenses by 50 percent.
When you go from 2 owners to 3, you only go from 50 percent to 33 percent, a 17
percent improvement, but the amount of time you have to spend communicating with
your partners doubles.

.... and so on (3 to 4, etc).

Be certain your partners have the same ideas you have about whether the aircraft
is to be maintained to barely meet FAA standards, or to be a fly-in show winner,
or somewhere in between. When something is broken, will they want to fix it
before the sun goes down, or shop around for the best price at several airports,
or have a partner meeting about it, or defer it to the next annual inspection?

Will they want to spend money on show-winning paint, or on avionics to optimize
for cross-country flying, or not spend anything they don't have to? What do you
want to do? Make sure the answers align.

Will they want to overhaul the engine as soon as the tach ticks over recommended
TBO? What do you want to do? Make sure the answers align.

Don't be fooled by taking on a partner who seldom flies, thinking that the
airplane will be always available for you - that partner is unlikely to be
motivated to get timely maintenance. After all, he doesn't plan on going flying
until next month anyway.