One of the most important decisions you'll make when buying an aircraft is how to title it. Should you own it in your personal name or under a business entity like a Limited Liability Company (LLC)? This choice has significant legal and financial implications that work in tandem with your financing.

The Case for an LLC: Liability Protection

The primary reason to use an LLC is liability protection. Owning the aircraft in an LLC separates the asset from your personal finances. In the event of an accident or lawsuit, this structure can help protect your personal assets (like your home, savings, and other investments) from being targeted. For this reason, most aviation attorneys and finance professionals strongly recommend using an LLC, especially for high-value or turbine aircraft.

The Case for Personal Ownership: Simplicity

Owning an aircraft in your personal name is simpler. It avoids the setup costs and administrative requirements of maintaining a business entity. For lower-cost, purely recreational aircraft, some owners may opt for this route, but it's crucial to understand the liability risks you are accepting.

Expert Guidance on Structuring

We have extensive experience working with individual owners, LLCs, and corporate flight departments. We can help structure your financing to align with your chosen ownership strategy.

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How Ownership Structure Affects Your Loan

From a lender's perspective, there is little difference. Even if the loan is made to your LLC, the lender will almost certainly require a personal guarantee from you as the principal. This means that while the LLC provides a liability shield from third parties, you are still personally responsible for repaying the loan if the LLC defaults. The requirement for a personal guarantee is standard practice in aircraft financing.

The Importance of Professional Advice

The decision to use an LLC is a legal and financial one. It's essential to consult with a qualified aviation attorney and a tax advisor. They can provide guidance based on your specific situation, helping you understand the full liability, tax, and operational implications of your chosen ownership structure.

Disclaimer: Jaken Aviation does not provide legal or tax advice. Please consult with a qualified professional.