Primarily for general aviation discussion, but other aviation topics are also welcome.
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By G-BLEW
Boss Man  Boss Man
#1834002
Rob L wrote:It's a Permit aircraft. You cannot have non-equity shares in a Permit aircraft, as MattL infers. Anyone taking up the advertiser's offer on the adveriser's basis is opening up a whole lot of legal, financial and CAA cans of worms.

Correct me if I'm wrong; but just don't go there.

Rob


Wasn't there a change a while ago allowing rental of permit aircraft? I may have remembered a proposal, but thought it had happened?

Ian
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#1834011
aerofurb wrote:LAA Technical Leaflet TL 2.09:

http://www.lightaircraftassociation.co. ... aining.pdf

:wink:


(and with a nod to G-BLEW's post about "rental")

Surely self-fly hire as quoted by Aerofurb's post is different to equity & non-equity shares? I see nothing in that document that says "equity", "share" or "equal" or "rent" or "rental" (perhaps it doesn't need to).

Again: I'm willing to be wrong & re-educated.

Rob
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By Dave W
FLYER Club Member  FLYER Club Member
#1834013
Presumably it would fall under the general UK philosophy of "Everything which is not forbidden is allowed"? Presumably in turn therefore, so long as the LAA and CAA documentation and requirements are followed, and that makes it feasible, it could be done.
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By foxmoth
FLYER Club Member  FLYER Club Member
#1834020
Not sure if the ad has been edited but it now reads
The offer is for equity shares of a new LAA permit aircraft to be based in Essex
so not non equity!
Advantages of a non equity are normally that you don't have the capital layout of equity, higher hourly rates than equity but generally cheaper than club hire with better availability.
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By Lefty
FLYER Club Member  FLYER Club Member
#1834023
The OP is misreading this advert. The guy is advertising a standard share. He wants 4 people to each own 25% equity in the plane.

By owning 25% of the aircraft you are also liable for 25% of the fixed overhead costs (insurance, maintenance, Hangarage etc).
The numbers he is quoting looks like the shareholders financial contributions (capital and monthly) are expected to cover all the normal expected costs, with quite a comfortable margin. I would expect that all the funds are held in a joint account to which all 4 equity holders have full access. It should not be in his bank account.
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By GrahamB
FLYER Club Member  FLYER Club Member
#1834024
Lefty wrote:The OP is misreading this advert. The guy is advertising a standard share. He wants 4 people to each own 25% equity in the plane.

I don’t think the OP misread it at the time. The ad has been changed from a non- equity to an equity offer. The previous version talked in terms of the £25k being a deposit, from which a £10k insurance excess could be deducted in the event.
By Lefty
FLYER Club Member  FLYER Club Member
#1834026
GrahamB wrote:
Lefty wrote:The OP is misreading this advert. The guy is advertising a standard share. He wants 4 people to each own 25% equity in the plane.

I don’t think the OP misread it at the time. The ad has been changed from a non- equity to an equity offer. The previous version talked in terms of the £25k being a deposit, from which a £10k insurance excess could be deducted in the event.


Thanks for the info Graham.
#1834027
Very speedy edit I think.

Definitely was "non-equity" earlier this afternoon.

Now looks quite interesting if you are happy with non-aerobatic aircraft.

Rob P
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By foxmoth
FLYER Club Member  FLYER Club Member
#1834029
If he wanted to do it non equity then he can, needs the LAA permission but it is then self fly hire/rental and you can operate it as you want - what you cant do is teach ab initio on it unless the person learning has a proper share
#1834045
If you look at the car market, or even the farm equipment adverts they are always pushing the £X per month finance angle. In recent years folks seem very happy to compartmentalize their lives into so much a month for this and that. It was only natural that recreational aviation would piggyback on the back of that trend.

Aviation people tend not to be team players and quite individualistic. The idea of shares in a regular flying group is great, but personalities can each pull in different directions. I find myself bestowed the unrequested role of agony aunt for a lot of group people. Shares are very liquid in populated locations, and very illiquid in more remote locations.

If I worked in a regular job, not in GA, and there was a good non-equity group near me I would probably prefer the non-equity option. You have less commitment to it if things change in your life. I do admit to being slightly envious of people who can rock up to an aeroplane in their good clothes, swinging a headset bag and head off. If it breaks they can say... jeez someone may get that brake/autopilot/radio sorted out :mrgreen:
#1834097
Thanks for the replies and also for validating that I'm not seeing things/going mad!

On a serious note, this advert piqued my interest because what the builder is/was trying to do sort of appeals to me on the other side of the fence. I haven't seen many kit builders appeal to 'investors' (if you like) to help fund the build in return for a share at the end (although, there's no way I'd be putting that sort of money in and even if I had that sort of cash lying around, I wouldn't be paying it for a non equity share).

Is there a reason for this?

My assumption is that if you're the sort of person willing to put in the blood, sweat and tears to build your own RV7 or whatever then you probably don't want someone else coming in and sharing your pride and joy if you don't need them to, but equally, financially it would make quite a lot of sense to offset some of your build costs. There must also be lots of willing takers (like me - lazy people who are happy to buy in but might not have the time to do the work).

Is there any legal/regulatory block on this as well? E.g. under the 51% rule, if you're taking funding for the build then either the syndicate members aren't contributing to the build, or you're effectively becoming a commercial builder for the syndicate?
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