California corp.

"Tony Cox" wrote in message hlink.net...
"Robert M. Gary" wrote in message
om...
My graduate law class just covered legal entities. By luck my partner
and I had registered our Mooney in a Mutual Benefit Corp (C-corp).


What is a "Mutual Benefit Corp"? A non-profit? As I remember, you'll
need to file more papers to avoid the minimum franchise tax of $800 (CA),
and will need to continue to pay that fee until your status is approved
(which can take over a year).

A Mutual Benefit Corp is already set up as non-profit. Once to corp is
approved you are already exempt from the $800/yr. You just need to
file to show that you don't make money.

Had
we not, the attorney teaching the class said we would probably be
considered "Partners" under the eyes of the law. If we had just put
the plane in our names we would have been "Partners". As near as I can
tell "Partners" is the laws punishment for not doing anything else,
"Partners" happens automatically by default. "Partners" is the worse
case scenario because it comes with unlimited liability.


There are other ways of protecting yourself against liability than forming
a corp. The extra insurance is often cheaper than messing with the
paperwork of maintaining a corp (if you can get a 'flat' policy).

Can you buy insurance to protect yourself against non-aviation
activities your partner does while going to the airport?

If your
partner is driving to the airport and hits a dog, the dog's owner can
sue you and take your house.

Perhaps the next class will deal with "piercing the corporate veil".
You might not be as enthusiastic about corporate ownership after
that.

It can actually be pretty tough to break, otherwise no one would ever
both with corporations. However, you do have to careful. If you load a
plane over gross and crash into someone, the corp is going to do you
any good, but it won't hurt you either.

-Robert