I'm currently saving money for a plane and training, and the expectations are that I won't have the money for full ownership of much else north of a Cessna 150. I'm investigating partial ownership instead, and I've read that forming a company/partnership to own the plane is better than each member of the group just pitching in out of pocket.

Are there any drawbacks to using this method for plane ownership?


2 Answers 2


The main thing to do is to realize why you're creating the corporation. We created a 501(c)7 (in the US) corporation which is a tax-exempt organization and falls under "social club." We did this to limit our personal liability. However, if you are creating the corporation to limit personal liability, you have to make sure to operate like a corporation - call each other "co-owners" instead of "partners" (there are legal ramifications to this, not just semantics). People around the airport should know it's a co-owned plane by a corporation, not that it's "your plane." Basically if you want the liability protection of a corporation, you must act like one.

Great book to read regarding the legal side of things is "Practical Aviation Law" by J. Scott Hamilton

Depending on how you set it up (we did a 501(c)7 tax exempt, and yes, you still have to file a tax return), how you use the airplane matters too. For example, we can't earn money using the airplane (conducting flight instruction to non-co-owners, for example), due to the 501(c)7 status. Under other corporate structures you can.

Finally, I guess to actually answer your questions: There are some pitfalls, but I think they can be avoided. Most group ownership things fail because of lack of communication and documentation, forming a corporation kind of forces you to spell out things explicitly and then all involved have no excuse for not knowing "the rules." (You have to write up bylaws and have at least one annual meeting, which forces the communication aspect!)


I was in a club like that. The big advantage (for us) was that we didn't have to pay sales tax when buying or selling a share. The club owns the plane (& the tools & the engine reserve, etc) and you buy shares in the club.

We had to have an annual meeting, officers, & file with the state. It wasn't a big deal.


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