Ownership of Aircraft in a syndicate.

[Blueadventures]

I have been involved in a discussion about syndicates owning an aircraft (for example a limit of 4 persons involved)

How is ownership determined?  Like; does a principal person become the primary owner and are the other syndicate persons an owner?

 

I read in CASA documents that a registration holder needs to be nominated and identified.

 

I see AOPA has information on aircraft syndicates.

 

Any comments or pointing in the right direction is appreciated as I would like to get the inquiries started in the right direction.

 

Thanks Mike

 

Registration for partnerships

Partnerships are not legal entities and do not meet the definition of an eligible person under CASR 47.010. Therefore, they cannot be registration holders or registered operators.

The parties involved in a partnership must nominate one of their group to be the registration holder. The registration holder must then nominate the registered operator.

Edited August 29 by Blueadventures

[sfGnome]

I was part of a syndicate for a number of years. I’ll say up front, the most important aspect of choosing syndicate partners is to make sure that they are easy going people who aren’t afraid of spending money - the kind of people who say “you want it today? That’s ok. I’ll go tomorrow”, and “we need a new farnarkle for the sprugleplatz? Sure, how much do we need to add to the kitty?”. I was very lucky to find partners just like that. 

 

As for organisation, we set up a Pty Ltd company that owned and registered the aircraft, with the 3 of us as directors (one of had to be specified as the maintenance manager). Primarily, that was to provide some legal protection for us, as in the case of one of us causing some major mishap, the aggrieved party could come after the company and its insurance policy, but not after the rest of us personally. From memory, it cost about $500 to set up the company, and the only overhead was that one of us (me) had to be the company secretary and file a report to ASIC once a year, and we had to have a ‘board meeting’ (ie I sent an email to the other two) where we agreed that we were not trading insolvent. 
 

Send me a message if you want more details. It was 10-15 years ago, but I probably still have some records that I can dig up. 

[JMLIS]

I once had a share in a Pawnee glider tug. It was also owned by a company. The company was purchased as an existing entity. It was in the days of "The bottom of the harbour" finances. We called it a "Bottom of Keepit Dam Scheme"! The company name was "Rick's Insulation".  Shares were bought and sold the same as a partnership, but the company was self funded with towing fees.

[Freizeitpilot]

https://www.recreationalflying.com/forums/topic/31091-aircraft-syndicates/

 

a brief earlier discussion on topic a few years ago.

[Jerry_Atrick]

OK, my shareoplanes have been in the UK, but here are my observations:

• @sfGnome's post is spot on. You want easy goign members not afraid to spend when it is needed. However, many tight-posteriors go for syndicates to get cheap flying, so beware. Having said that, one of my cardinal requirements is there can't have been a cash call for routine  maintenance. One of the benefits of a syndicate is that you put enough in your monthly sub and hourly rate to cover most routine maintenance. The only exception is my TB20 syndicate, where the costs are clearly not designed to do that and the Shareholder's agreement explicitly states so.
• Your syndicate is only as good as its crappiest member, and I would prefer the crappiest member to be me. To be honest, the syndicates I have been members of have been normally pretty good, and yes, I have been the TB20 Syndicate's crappiest member (though I became a member because the ejected a member for doign a gear-up landing). Every other syndicate member is miles more experienced than me.. there is a PPL - yes PPL, with out 10,000 hours... On the hourly rate of the TB20, that is 1.25 million he has spent flying (in todayy's money) over the journey. Nuts. But, in a PA28 group I was in, we let some fellow in, who wasn't too dangerous, but a pain. Overtightened the dipstick, left theplane grotty, and after we spent £17K on a respray, dinged one of the wings. I left that syndicate not long after he joined, but he was ejected from the syndicate.
• This wil depend on your personality, but I prefer syndicates that are flexible. As soon as I hear you can only have the aircraft at most 5 days in the month, and that you have to seek permission to sell your share and that the group sets the sale price, I walk away,. Some people prefer the regimented life, but not me. And I don't care if there is no formal written share agreement; you find that most flexible syndicates are like that because the members are usually flexible themselves and accomodating; the ones with strict rules tend to have a cowboy or two so need those rules. 
• I hgave found there should be a separate admin/CEO type, and maintenance leader. I was in a syndicate where there was one leader who looked after everything and the plane ended up more grounded than not. One of the great things about syndicates is that there is usually someone who loves the admin, someone who loves the maintenance, but they accept other members joining in on that stuff if they want to. I love these syndicates, because, to be frank, I can't be posteriored with all of that; I want to take the covers off, check the papeerwork, and just go flying. 
• Finally, and thius is probablky more for the UK than Aus, because the UK does not have the club scene to anywhere near the same extent as Aus; find a syndicate where you get on with most of the pilots. One thing I found out about myself when I got my license and went flying further afield, is that I prefer it in the company of others; and better still, especially when that another is a member I get on well with. I did London --> Le Touquet --> Luxembourgh --> Cologne --> Cherbourg --> London in a day, it is nice to have another pilot to do the alternating legs, especially one that you get on with. Have done a few longer tours with other members. So, make sure you get on with a few of the members.
• Optimal number of members? Its going to depend on you. Of course, the more members, in theory, less availability. But don't believe that. All syndicates I have been in have been 8 members.. And all of them had at least two that rarely, if ever, flew. I can count the times with my fingers in over 10 years of syndicate ownership the aircraft wasn't available when I needed it. And of course, if you're in a syndicate that is flexible and reaosnable, you can email the pilot who has booked it when you really need it, and ask if it is OK to swap. Although I haven't written the email, I have received two, and yeah, it was no problem. 
• If your mission requires more than one type of aircraft, then Syndicates can be a great way of getting access to different typles of planes for the priceof one. There is a bloke in the TB20 syndicate that has a share in a twin and a Pitts, I think.. 

 

There are pitfalls - mainly around having cowboys/cowgirls in the group, and I would recommend meeting any new prosepct rather than leaving it to the head honcho. 

 

I can't speak for Aussie aviation law, but in the UK, syndicates are far more prevalent than Aus (at least when I left in the mid 90s), and they tend to be either private companies, or trusts. If you have a provate company, there may be GST implications.                                 

Edited September 1 by Jerry_Atrick