Comprehensive agreement to regulate the fractional (shared)
ownership of an aircraft between three or more parties
About this document
This agreement is suitable for any arrangement where three or more sets of people share ownership and use of any type of aircraft for pleasure or business. The document has been drawn so for a situation where only one owner uses the aircraft at any time. However, there is nothing to prevent the second owner sharing use.
The best structure for you: Before you purchase this document, consider suitable structures for your sharing proposal. We believe there are two best ways to share ownership of an aircraft. If you are looking at a commercial arrangement or one for more than ten people, hold the aircraft in a limited company, then buy and sell shares in it. This way, ownership of the aircraft itself never changes. No stamp duty is paid once it is bought as the right of occupation can be treated as a licence.
Running a company is not suitable for everyone. If you have between 2 and 10 owners it is a matter of preference as to whether you want the formality, expense and greater certainty of a company structure and shareholders agreement or the lower cost and comparative informality of our other suggestion for aircraft sharing – a fractional ownership agreement such as this.
We offer two versions of this document. One is for a situation where only two parties share - two individuals or two families, or whatever. The other is designed for more than two parties.
Even if ownership of your aircraft is registered, the organisation will not record the shares in which it is held. So if you own 60% and I own 40% we have to record that in some other document. If we do not do so, “the law” will assume we own in the shares in which we contributed to the purchase price. This may or may not be the same thing. These Net Lawman agreements specifically record the shares. They also record shares which may be owned by someone who is not a registered owner (this is called a beneficial interest). Of course the document also provides for more practical matters to – such as who has the aircraft when, how it will be transported, security, repairs and more.
Application
and features
Comprehensive fractional ownership document for any type of aircraft
Sensible and practical provisions for shared ownership
Written in plain English
Explanatory notes to guide you
Contents
Terms of beneficial interest: beneficial trusts provision
Price and payment for the aircraft
How many people allowed in the aircraft at one time and who they may be
Who and how will manage payment of expenses
Purchase of accessories for the aircraft: how they are purchased, whom they belong to
Management of the aircraft, including operating costs
Management structure ordered by annual meetings of the owners, possibility of proxy voting, and more
Undertakings by the parties
Alternative exit strategies, including for a share to be sold to a third party, after offering it to all other owners
Timetable in the form of a schedule to allow you to arrange who will have the aircraft when
Effect of termination
Alternative exit strategies
Other legal provisions
Word
Count (approximate):
Document: 3000
words
Explanatory notes:
400
words
Draftsman
This document is drawn and maintained by Net Lawman. It is real law in plain English.
