Privately Instructing: Corporation??

[pipers]

I made the post about instructing privately and recieved alot of helpful information from all who replied (Thanks!). I have one more question conerning flight instruction. I just got back from meeting with my insurance agent (we are in the process of make the switch form private to commercial). Anyhow, there will be a few instructors involved with our operation and my agent suggested that we make our operation a corporation. The idea being the all involved would be covered rather then just four or five names on the insurance. I have some lawyer friends who can draw up agrements so, that shouldn't be a problem. Anyone out there have any experiences with this?? Pro's and Con's??
Any info or opinions would be valuable. Thanks.

PS....for those of you who didn't read my last post, I am starting to instruct privately, as well as selling time, out of my own plane.

 

[Timebuilder]

Is your plane the Cruiser or the Warrior, and where are you based?

 

[kevin40za]

who is your insurance company and how much are you paying annually for commercial insurance...

 

[pipers]

info:

It is a Cherokee Cruiser.....we're based out of Salt Lake and we've been quoted about $3,500 on the insurance. We'll finalize everything next week and see if that quote really pans out.

 

[de727ups]

incorporating

I did it. To me, it's a lot of paperwork and if you don't do everything right...they can still come after you. I had to have an accountant. You have to be very careful about how you run the business to maintain your protection. Honestly, if you're not worth a whole lot of money, you don't make as great a target to come after and I wouldn't worry about it. Get the best insurance you can afford and be picky about your CFI's, have high standards for them and your students....that's the best insurance you can get. Will the insurance company just let you add CFI's as you wish? I don't see how incorporating would solve the problem of insurance and several CFI's.

Also, I know nothing about them, but you should look into LLC's....Limited Liability Companies...or something like that....supposedly they offer the benefits of incorporation but are less complicated.

I did what you are doing a few years back out of BFI, started with a 172 and it grew to five planes. Never made a dime and it was a major pain in the ass. My advice is keep it as simple and small as you can. If your doing it to build time as a CFI and make good money instructing...it's a great way to go. Try to find a mechanic who will trade you for flying time. As I mentioned before....I used autofuel and my only problem was the logistics involved and the local airport authorities....big airports don't like it when you don't follow their BS rules. I've burned autogas for 15 years in 150's, 172M's, and a Cherokee 140. The 172 had 2400 hours on the engine when I sold it....all from my operation and mostly autofuel.....no problems. Some say it's unsafe...all I'll say is my experience is different and leave it at that.

The bigger the airport the more BS you'll have to put up with to run a business there. One of the best days of my life was the relief I felt when I closed the business and didn't have to deal with big airport anymore. It's a shame that operating an aviation business has become such a regulated and restricted nightmare.....

 

[Timebuilder]

I loved flying the Cruiser, even if it did land like a brick. I did my private in one.

I'd look into incorporating in Delaware, as there are tax and other advantages. Talk to a good attorney about this. If you are AOPA, you can call Yodice Associates and they can give you a steer. Member services has the number.

Good luck.

 

[aero99]

LLC, Limited Liability Corp.

I just went through this for one of my businesses. To form an LLC, you will need 3 partners. This is one of the requirements. I did it on line through a broker. Took about 3 weeks and cost about 800.00. If you go through a lawyer, it could cost anywhere from 1200.00- 3000.00 depending on how complicated you set the articles of organization.

There are many different ways to Incorporate and you should talk to someone (accountant or lawyer) that can explain the pros and cons of each and what would work best for your company