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Delaware Limited Liability Company (LLC) and its advantages

A common entity choice, a Delaware limited liability company (LLC) is a hybrid business entity, designed to combine the liability protection enjoyed by a corporation with the flexibility of a partnership.

Like a corporation, the owners of an LLC are not personally liable for the LLC's debts and obligations. Unlike corporations, LLCs have less documentation formalities and do not need to hold annual meetings, although a written LLC Operating Agreement is advisable. Like a partnership, an LLC can be treated as a pass-through entity for tax purposes. This may be advantageous for those who cannot meet the IRS requirements for an "S" corporation and want to avoid double taxation.

Delaware LLCs are as easy to create as they are to maintain, with minimal information required to be publicly listed on the Certificate of Formation. This makes the Delaware LLC attractive when members desire protection of privacy because LLC members do need to list their names or addresses on the formation document. Additionally, a Delaware LLC does not have an annual reporting requirement.

The LLC may not be appropriate for non-US persons forming an entity for aircraft ownership, especially when planning to register the aircraft with the FAA.

In summary, a Limited Liability Company provides:

  • The pass-through tax treatment of a partnership
  • The liability protection afforded by a corporation (and not available with a partnership)
  • The freedom from the restrictive and burdensome qualification and operating requirements that come with an "S" corporation.

Setup an LLC

Please note that upon registering an aircraft with FAA, the LLC may need to submit a copy of its Operating Agreement. The agreement is found in the company kit, which we can provide to you for an additional fee.

You should check with your accountant or tax advisor to determine if a corporation or a limited liability company best suits your individual needs.
Per Delaware Code 18-305(h) A Limited Liability Company shall maintain a current record that identifies the name and last known business, residence or mailing address of each member and manager.

(Note: If you are the communications contact for the LLC you must have access to the name(s) and address of each member and manager to be provided upon request).

Delaware LLC vs Delaware Corporation

Delaware LLC
  • Separates personal assets from business
  • Owned by Members
  • Ownership described in units or percentages
  • Controlled by Members and/or Managers
  • Governing Document is Operating Agreement
  • Structure recognized mostly in US
  • More Private- no annual report filing requirement
  • Allows for Operational Flexibility
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Delaware Corporation
  • Separates personal assets from business
  • Owned by shareholders
  • Ownership described in shares
  • Managed through Board of Directors: Daily operations overseen by officers
  • Governing Document is ByLaws
  • Structure is recognized in US and Internationally
  • Annual Report Filing Requirement with State of Delaware
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