The rules require that you have a minimum 5% share to be exempt from public transport requirements and that you pay a proportionate amount of the fixed and variable costs.
I don't doubt you but (I assume this is UK you refer to) do you have the reference for the bit I put in italics?
I ask because a lot of syndicates are falling apart because some member(s) refuse to pay for some stuff (IFR avionics is a common case) leaving others to foot the bill or let the plane gradually fall apart functionally, and it would suprise me if such syndicates were illegal under the 5% min share rule.
Falling apart is allowed. Can't give c&v but it's a well known Fact. Max 20 shareholders. That's where peeps get the 5% thing from. CAA reg.
On syndicates falling apart, I think it's important to treat any syndicate you want to start or to join as more like a marriage than just a way of getting access to an aircraft while not having to spend a 5 or 6 figure sum. For example, in the case of IFR avionics, if you're a VFR only pilot and are going to join a syndicate in an IFR aircraft that is used for IFR, then you should be fully prepared to pony up for avionics upgrades - and if not, then don't join that syndicate. Similarly, if I ran a syndicate on an IFR capable plane mostly flown by people with instrument ratings I'd be leery to accept a VFR only pilot unless he or she fully understood that by buying in, they don't get to pick and choose which capital costs they are part of.
I'm quite fortunate that our own syndicate is pretty informal and we're all of the same mind, and we all show flexibility even though that's cost me a bit more money than I expected to spend with the wing recover we just did. I didn't get into GA to save money!
It's covered by article 269 as far as the UK is concerned:
Public transport and aerial work – exceptions – jointly owned aircraft
269 (1) A flight is a private flight if the aircraft falls within paragraph (2) and the only valuable consideration given or promised for the flight or the purpose of the flight falls within paragraph (3).
(2) An aircraft falls within this paragraph if it is owned:
(a) jointly by persons (each of whom is a natural person) who each hold not less than
a 5% beneficial share and:
(i) the aircraft is registered in the names of all the joint owners; or
(ii) the aircraft is registered in the name or names of one or more of the joint owners as trustee or trustees for all the joint owners and written notice has
been given to the CAA of the names of all the persons beneficially entitled
to a share in the aircraft; or
(b) by a company in the name of which the aircraft is registered and the registered
shareholders of which (each of whom is a natural person) each hold not less than
5% of the shares in that company.
(3) Valuable consideration falls within this paragraph if it is given or promised by one or more of the joint owners of the aircraft or registered shareholders of the company which owns the aircraft and is either or both:
(a) in respect of and no greater than the direct costs of the flight; or
(b) in respect of the annual costs.
[edited for formatting]
