I am a bit lost with this one, so to throw some questions into the pot.
1: How can a limited company, paying staff who just happen during their working day to leave their "administrative" duties and give a flying lesson (without direct pay) be classed as non commercial operation?
2: How can "privately operated" aircraft have all of the bills paid by the limited company and give instruction thinly guised as a club?
3: How can instruction for the initial issue of a licence be given on an aircraft that is maintained by a network of non licenced inspectors on an "on condition basis" and operated in a "club" enviroment with paid employees- its not allowed for the issue of an initial licence in aircraft regulated by the LAA.
Forgive me for being so blunt, if this is a real loophole in the EASA / CAA legislation then its a fanastic chance for many to get on with flying and making a living rather than suffering the red tape and the cost of intructors getting a CPL / FI rating and the club an RTF (or ATO under EASA) registration, it also also seems to offer the chance of significantly reduced operating costs compared to aircraft maintained by a CAA approved maintenance organisation. It seems akin to LAA owner / operator status