When purchasing an aircraft that will be registered in the United States (U.S.) some of the closing documents must be filed with the FAA aircraft registry at the time of title transfer. The FAA does not hesitate to reject documents that do not reflect correct information or that are not signed by the proper party. This can cause headaches for a new aircraft owner who thought they were finished with the purchase and the closing and is flying their new airplane, only to be informed by the FAA that the documents were rejected.
FAA Bill of Sale (AC Form 8050-2)
The FAA Bill of Sale (AC Form 8050-2) must list the correct aircraft description and be signed by the appropriate party using a title that the FAA will accept. The FAA requires that an original hand scribed signature or the use of an acceptable electronic signature of the FAA Bill of Sale be filed. If the entity selling the aircraft is a limited liability company you should make sure that the LLC Statement (discussed below) on file with the FAA is still correct and that the signatory and their title on the FAA Bill of Sale matches what is currently on file with the FAA. If anything about the LLC has changed you will need to file an amended LLC Statement in Support.
FAA Registration Application (AC Form 8050-1)
The FAA Aircraft Registration Application (AC Form 8050-1) was the last carbon paper form used by the FAA for aircraft registration. It has been updated and is now a form that can be typed on your computer and printed on your printer, like the FAA Bill of Sale. The FAA Aircraft Registration Application must also contain the correct aircraft description and be signed by the appropriate party using a title that the FAA will accept. If the entity purchasing the aircraft is a limited liability company, the signatory and their title on the FAA Aircraft Registration Application must match that of the LLC Statement in Support. The address used on the FAA Registration Application should be carefully selected as it is the address to which the FAA will send correspondence and important notices. Your tax advisor should also confirm that the address used is acceptable for your state tax planning purposes. The FAA requires that an original hand scribed signature or the use of an acceptable electronic signature of the FAA Aircraft Registration be filed. A copy of the completed FAA Aircraft Registration Application must be placed on the aircraft after closing to serve as the temporary aircraft registration until the permanent registration is received. The temporary registration certificate can only be used for flying within the 48 contiguous U.S. states. Once the FAA has accepted and processed the documentation the FAA will issue the permanent Certificate of Aircraft Registration (Form 8050-3) which allows the aircraft to fly beyond the 48 contiguous U.S. states.
LLC Statement in Support
The LLC Statement In Support of Registration is required if the buyer is a limited liability company. When completing this document you state whether the entity is member, manager or officer managed and whether the manager(s) can act independently. For example, if you complete the box that the entity is Manager managed by John Doe and Jane Doe and then you mark the box that they can act independently, you are stating that John Doe does not need Jane Doe’s approval to execute documents and the FAA documents will then only require one of their signatures. However, if you mark that John Doe and Jane Doe as Managers cannot act independently, then the FAA documents must be signed by both John and Jane. If you are forming a new entity to purchase an aircraft this is important to keep in mind, especially if one person will be unavailable to sign documents.
DIO – Declaration of International Operations
A Declaration of International Operations will need to be completed if an international trip is planned immediately after closing or prior to the receipt of the permanent Certificate of Aircraft Registration. An aircraft cannot fly internationally using only a copy of the FAA Registration Application (AC Form 8050-1).
In addition to the FAA documents above, there are additional documents and procedures related to an aviation transaction. Avoid frustration and eliminate closing headaches by hiring experienced aviation counsel who is knowledgeable about the process and familiar with the closing documentation to help you have a smooth landing with your aircraft purchase.
Melissa K. Gowin is a Senior Legal Assistant with the aviation law firm of Jetstream Aviation Law, P.A. and assists attorneys, clients and escrow agents in coordinating documentation for complex aircraft purchase, sale and financing transactions. Jetstream Aviation Law can be found at www.jetstreamlaw.com. Melissa K. Gowin (email@example.com)
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.