Wed Apr 17, 2019 9:57 am
It might help Dman to explain the very simplest example.
Suppose that someone owns an aircraft outright, but wants you as a syndicate partner. The deal works out like this:
1. You buy your share of the aircraft, say half, and pay the current owner.
2. There are costs to just owning the thing - mainly insurance, hangarage/airfield fees and regular/annual maintenance and inspections. You share these between you. It's common to work out a monthly payment into a shared bank account which will cover these costs ("monthlies").
3. Flying costs (fuel, landing fees etc). Each owner pays for what they use.
4. Unknown future costs - major overhauls, replacement of major parts like an engine, etc. If you both have deep pockets you can pay for these as they occur. Or you can pay regularly into an account which you hope will cover them, often known as an "engine fund".
Then you need a syndicate agreement to cover things like who has the aircraft in preference to the other, how to decide about things like upgrading instruments, refurbishing worn things, what happens if one of you wants to sell, etc. This agreement might be verbal, or it might run to several pages.
That's the simple version. In a complicated syndicate with lots of partners owning unequal shares, you have to modify the basic scheme to fit in with the needs of the group.