November 12, 2014 – Newsletter
I can’t understand why people are frightened by new ideas. I’m frightened by old ones!
– John Milton Cage, Jr. – Composer, music theorist, writer and artist
Can there ever be enough written about Limited Liability Companies?
It is one of the most confusing issues the FAA has dealt with to date.
The FAA needs to know the following about limited liability companies:
- The full name of the LLC
- The State in which the LLC is lawfully organized;
- The name of each of the members of the LLC and the type of entity of each member;
- Whether the LLC is managed by its members, managers or officers;
- The name of the managers or officers, if applicable, and type of entity;
- Whether the members, managers or officers may act independently;
- And: the citizenship status of each member and each manager, or officer.
If the applicant LLC includes a member and/or manager that is also an LLC, the above documentation must also be provided for the member LLC.
If the management of the LLC changes at a later date (e.g. originally managed by members, but now by a manager) the Registry must receive written notice of the change. This may be submitted in the form of a written statement, a copy of minutes of a meeting, an amended operating agreement, etc. The submitted document must explain any changes or additions made and give the effective date of those changes or additions.
Acceptable Titles for Signing LLC Documents
If an LLC is managed by its Members, the FAA will accept only documents signed with the title “Member”.
If an LLC is managed by a manager, the FAA will accept any title which includes the word “manager” (e.g. managing member, member manager, etc). Member alone or corporate type titles (President, Vice-President, etc.) would be unacceptable.
An exception to the above rules would be if the LLC documentation shows to be managed by a managing member. Member alone or Manager alone would be acceptable.
If an LLC is managed by officers, and the specific officers’ titles are shown (i.e. president, vice-president, secretary-treasurer, etc) the FAA will accept only those titles. In this case neither “manager” or “member” would be acceptable. If an LLC is managed by officers and no specific titles are shown, then any officer can sign.
If an LLC is managed by a Board of Governors, the FAA will accept the title “Governor”. In this case no other titles would be acceptable.
Please note: If multiple bills of sale are submitted which only “pass through” the LLC and the signer shows a title of Manager or a corporate title, the FAA will not ask for further LLC documentation. If however the signer shows a title of “Member” the FAA will request documentation showing that the member is the appropriate signatory.
Prior to September 1999 LLC documentation was not required when registration documents were signed showing a corporate or managerial title. Corporate or managerial titles on subsequent documents for that aircraft are acceptable without requesting LLC documentation. If subsequent documents are signed showing the title “member” then the FAA will ask for further LLC documentation showing that member is the appropriate signatory.