Ownership & Groups; Who is Who?

[XX621]

Perhaps someone can clarify something for me?

In a typical PPL group ownership scenario of a single engine light, who is the legal owner and who is the operator?

Note, according to the G-INFO website, the registered owner is not necessarily the legal owner.

If group member X buys a share of the aircraft, do they become a legal owner and operator in part with all the other members?

Thanks in advance.

[Fuji Abound]

Simply:

The legal owner(s) is / are the person(s) named on the sale contract or the invoice.

The operator(s) is / are the person(s) who are responsible for "running" the aircraft.

For example, a person might buy an aircraft (he is the owner) and lease the aircraft to a flying club (who are the operators) who in turn my authorise a pilot to flying the aircraft.

Of course in the flying world even though the pilot may not be either the owner or operator he is legally obliged to discharge all his responsibilities under the ANO.

Where finance or limited companies are involved the legal position may be more complex. A company can be the owner, and the company is in turn owned by its shareholders. An aircraft on a finance lease is owned by the finance house, whereas an aircraft on hire purchase is owned by the person who purchased the aircraft, but the aircraft is charged to the finance house.

[XX621]

Thank you Fuji.

So, if the ANO says the "operator" is legally responsible for something, and the operator is a PPL group, all the members are equally responsible for ensuring the aicraft is operated legally, and equally culpable if not?

I am playing through a, admittedly hypothetical, situation where one group member does something which could be, strictly speaking, deemed "dodgy" to the aircraft (not associated with a flight). Would the other members be held equally to account for the action if the group were aware and in agreement? Or, would they not be responsible if there were not aware?

Interesting. I am in a group but am realising I know little of the legalities involved, so should find out in case the situation arose.

[C172 Hawk XP]

We operate our Group (guess what type we fly ! ! ! ) as a Limited Company. Each member has one tenth of the shares. Two of us are the Directors of the Company. We are registered at Companies House, and submit full annual returns and accounts. We aim just to break even, not make a profit, and for that reason we are treated by HMRC for taxation purposes rather like a social club or association.

The Company is both owner and operator of the aircraft, and all members (ie shareholders) are expected to operate the aircraft in accordance with the agreed rules and practices.

[Fuji Abound]

C172 XP

I suspect you may have made a few technical errors in your analysis. (which also partly answers XX621's question).

Whilst the company is indeed the legal owner a company has no persona. The directors of the company in Company Law are responsible for the conduct of the company. It is often wrongly suggested this responsibility befalls the shareholders. It does not. The shareholders are not "responsible" at all for the conduct of the company. Part of the reason for the confusion is commonly the directors and shareholders of private companies are the same people - where this is so, they simple have two, but equally seperate functions.

The company is indeed the owner IF the company purchased the aircraft. If one or more of the individuals now making up the company purchased the aircraft then strictly the company is not the owner unless they documented a sale to the company and / or excuted a deed of trust that they held the aircraft in trust for the company.

The company may also be the operator, but as I indicated earlier, because the company has no persona it is the directors of the company who are ultimately responsible for discharging the responsibilities of the operator. It is a sublte point, but whilst it is the company against which an action would be brought it is a matter for the directors to defend the actions they took on behalf of the company.

The ANO uses the term operator in a specific sense. For example the ANO places a sepcific requirement on the operator to the retain the maintenance certificate for two years (10(6)). The operator may be a company for the purposes of the act but it is the directors who are responsible for ensuring the company fulfills its obligations. Take note, the directors, not the shareholders. In this respect strictly those members who are shareholders of a limited company but are not directors are not responsible.

As I indicated earlier the pilot has numerous obligations under the ANO and the pilot might well be neither a shareholder or director.

In terms of strict liability in the event of an accident in the aviation world this is set out in the Civil Aviation Act and is quite unlike other areas of asset liability.