Although not specifically mentioned in the Federal Aviation Regulations the FAA does allow for registration in the name of a LLC. However, due to its flexible nature and more recent adoption, registration in the name of an LLC is a bit trickier than registration in the name of other types of corporations. Prior to registration in the name of an LLC, the FAA
will require two documents unique to the LLC structure.
First, the FAA will require a copy of the LLC’s organizational documents. The organizational documents must include the name of each LLC member and clearly state how the LLC is to be managed. In most cases an LLC is managed by its member(s) or manager(s). In some cases, management authority is delegated to an officer or officers of the LLC. Due to the overwhelming popularity of LLCs and their somewhat free form of management, the FAA requires the organizational documents to confirm the authority of a signatory to bind or represent the LLC.
The second document that the FAA will require is a written representation by the LLC stating with absolute certainty that it does qualify as a US citizen. LLC citizenship is tested by the FAA using the same criteria they do for corporations. Accordingly, the LLC must (a) be organized under the laws of the United States, (b) the president and other managing officers and/or members must be citizens of the United States, and (c) at least 75% of the voting interest must be owned or controlled by citizens of the United States. Member interests of the LLC are equated to voting interest in the FAA analysis. Unlike corporations, LLCs may not register as a “non-citizen corporation.”
This citizenship document must include basic information about the LLC such as its name, state in which it is organized, date of formation, name and entity type of each member, management structure, and some additional details about authorized delegation. Due to the level of detail required, this document can get fairly complex, especially when some of the members or managers of the LLC are entities rather than individuals. The FAA requires this second document to drill down to the entity members and to confirm that they, as the controlling entities, are U.S. citizens.
Despite the fact that the LLC structure is so popular due to its simplicity and flexibility, the
additional requirements imposed by the FAA makes them significantly more complex when it comes to aircraft registration. This reality, coupled with the potential fines and citations associated with operating an aircraft under an invalid registration, can make the usually simple LLC a real challenge to the aircraft owner. Accordingly, if you find yourself needing to register your aircraft in the name of an LLC and you have questions, give us a call or contact us and we will be glad to help.