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Is it all right to set up a subsidiary, affiliated corporation, or special purpose entity to own and operate the aircraft for liability reasons?



It’s very common for businesses that are owning and operating aircraft to set up a special purpose entity or a subsidiary specifically to own and operate the aircraft, to separate those operations from the main business for liability purposes. It is important to remember that there can be tax consequences of doing so, and for FAA purposes you want to make sure that there is some separation between ownership of the aircraft and operation of the aircraft so as not to run afoul of Part 91 operation rules. Yes, a subsidiary or a special purpose entity can and often should be used for aircraft ownership and operation, but you want to be careful about the way you separate those costs and structure that operation to make sure you’re FAA compliant.

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