If your Limited Liability Company (LLC) will register your aircraft you must file a Statement in Support of Registration of a United States Civil Aircraft in the Name of a Limited Liability Company (LLC Statement) with the FAA when you file the AC Form 8050-1 Aircraft Registration Application. The LLC Statement confirms to the FAA that the LLC qualifies as a United States citizen and that the signatories on the documents you submit to the FAA are binding on the LLC pursuant to the LLC documents. The FAA does not have a required governmental form for the LLC Statement and several different versions are acceptable to the FAA, provided that they contain all of the required information.
Review the LLC Operating Agreement
It is important to review the Operating Agreement for your LLC and then accurately complete the LLC Statement. If the information as to who can sign for the LLC, which is on your LLC Statement, does not match the way your documents are signed, the FAA will reject the documents.
The LLC Statement requires information including the name of the LLC, the State in which it is organized and the date of formation of the LLC. It also requires a list of the Members, Managers and/or Officers of the LLC and you must confirm whether each meets the FAA’s definition of U.S. Citizen.
The FAA has its Own Definition of US Citizen
The FAA’s definition of U.S. Citizen can cause confusion. 49 U.S.C. Section 40102 (a)(15) defines Citizen of the United States: “(C) a corporation or association organized under the laws of the United States or a State, the District of Columbia, or a territory or possession of the United States, of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the United States, which is under the actual control of citizens of the United States, and in which at least 75 percent of the voting interest is owned or controlled by persons that are citizens of the United States.”
If any member, officer or manager of the LLC is not a citizen of the United States or if you question whether your entity meets the FAA’s definition of Citizen of the United States, you should consult aviation counsel as soon as you realize you have a question. There are solutions allowing US registration of your aircraft if your entity does not meet the FAA’s definition of Citizen of the United States, however you must allow time to implement any solution.
If an LLC Statement includes the option to attach an additional sheet for explanation to substantiate that the LLC qualifies as a citizen of the United States, and you must explain why you believe your entity meets the FAA’s definition of Citizen of the United States, you should consult aviation counsel before you file your documents with the FAA. You should not wait to consult experienced advisors until your aircraft is grounded because the FAA has rejected your aircraft’s registration documents.
Can each Member or Manager Act Independently – Read the Operating Agreement
Another question on the LLC Statement in Support is whether the managers, members or officers of the LLC can act independently. If the Members manage the LLC and you check the box they can act independently then any of the Members you listed can sign the FAA Registration Application and any Bill of Sale as Member without any other Member’s signature. If you check the box that the Members cannot act independently, then all Members must sign all of the documents (including the FAA Registration Application and any Bill of Sale). It is important to confirm whether one person is able to “act independently” to bind the LLC or if it takes more than one person to bind the LLC when purchasing and selling the aircraft.
The FAA will check that the signatory to the FAA documents matches the information you provided on the LLC Statement. If your information conflicts, then the documents will be rejected by the FAA.
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)