Hi there
I think that it has been firmly established that a corporation is separate entity.
(See recent Supreme Court decisions)
There are several cautions
1. If you have a corporate bank account, ONLY use it for the aircraft NEVER buy a gift for your wife from that account
2. Have annual meetings. Which is a book keeping entry once a year
3. File yearly tax returns and pay franchise taxes
This is as true for your business corp as it is for your Nevada corp
Personally I keep corporations for business trucks, real estate owned, even the cars i drive, and business entities.
ONLY IF YOU WANT TO PLAY WITH IRS DEDUCTIONS
I wouldn't try to deduct aircraft cost from personal taxes unless you have more than one airplane or unless you carefully document your use versus your personal use. THEN, to be safe pay a fair rent to the corporation
All of this can save you a lot of money
If you lend your corporate plane to a friend and he crashes it into a meeting of the billionaires club, your personal assets are protected.
Peter
To: lml@lancaironline.net
Date: Sat, 31 Aug 2013 18:15:08 -0400
From: mpgarr01@hotmail.com
Subject: [LML] LLC for Insurance - Caution
As I understand it, you & your partner want to insure a Lancair turbine aircraft located in CA. The only available insurer has determined not to do business in that state. You propose forming an LLC in NV (presumably making the A/C an asset of that LLC, at least on paper) in order to get the desired coverage from the company. Presumably the A/C is in CA and you intend to base it there or the insurer would not be balking about doing business in that state.
It's certainly possible the company will ultimately accept your premiums and issue coverage to a newly formed NV entity. As a retired/reformed lawyer, however, I have concerns about your proposal. Unless you are truly doing business in NV and have substantial business contacts with that state there's a real risk that plaintiff's counsel will attempt to "pierce the corporate veil" in the event of a mishap in CA or any other state apart from NV.
Piercing the corporate veil involves holding the owners of an LLC (you and your partner) liable for the debts of the company (damages in a mishap).
Generally, piercing the corporate veil can only be done in extreme
situations such as when the shareholder commits fraud or when the
corporation is deemed the “alter ego” of the shareholder. The standard
for successfully piercing the corporate veil in NV may be stricter
than in your home state. However, it is important to note that if litigation takes place in your home state or in some other state besides
NV, conflicts of laws principles may cause the law of a state other
than NV to control whether a piercing the corporate veil action
would be successful. In other words, judges often have a lot of
discretion as to which state’s laws apply in multi-state cases and often
begin with the assumption that the law of the forum applies unless a
party can show that another state’s laws have greater contacts or
interests in the case.
In fact, while NV corporations are often
promoted as being particularly useful to business owners in CA,
CA has been one of the most aggressive states in applying its
own corporate laws to businesses incorporated elsewhere but doing
business in CA. The more serious the mishap, the greater the scrutiny your "corp." is going to be subject to.
Recommend you consult CA counsel with a background in aviation law before leaping on this idea.
Cheers, Mark (Notre Dame, JD, 1984)