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]
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!
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.
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.
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 take that to mean that if the group dissolves, then you have a claim to 5% of the groups nett assets and liabilities. So long as you are paying at least 5% of the fixed costs and an appropriate amount for usage, then you are not flouting the rules.
The offer could be whatever would be acceptable to both the main owner and the share buyer. I see no reason why you wouldn't offer to buy back at the instigation of either the main owner or share owner.
At present I'm approaching things more from the other direction. My job means I'm likely to move 2-3 times over the next decade, before settling down. I would have bought an equity share in an aircraft had it still been on offer by the time I got my act sorted, but would not have considered it without a buy-back guarantee. As I recall the offer was a share for £1500, but buy-back for only £1000.
I guess the concern is that if the share-owner isn't seen to have equal rights and responsibilities then it could be argued that you were effectively renting rather than co-owning. Perhaps. For example, if I offered day-long shares for £1 in a permit aircraft with rental costs of £50 an hour, this in my view would be a clear breach of the spirit of the rules and not something I'd contemplate. But where would you draw the line?
Is that the offer? I read it the OP will be able to buy back at any time he wishes
Purely from a personal viewpoint, I would rather be in a position where I am forced to sell to a ready buyer, than find myself desperate to sell with no buyer in sight and ongoing overheads to meet'
At least with the former, I walk away with money, no ongoing costs, and ready cash to buy another share elsewhere.
Somebody who would be happier knowing that they had a ready buyer for their share, rather than having to continue to pay costs because they were unable to sell it when they themselves wished to relocate.>
Is that the offer? I read it the OP will be able to buy back at any time he wishes - but the share buyers cannot make him do so at a time of their choice. I'd be very wary of a two member group - four would be OK. I'd also be wary of an unequal equity group. (Member of a six group for over 23 years)
What is not often understood is that the share is in the partnership (or the limited company if applicable) and the aircraft becomes an asset of the partnership (or Ltd Co.). Permit or CoA makes no difference AFAIK.
The partnership agreement (verbal or written) can say anything that a prospective will accept. Guaranteed buy-back is attractive to some. It's not unusual in commerce and companies sometimes buy back their own shares. But on-demand by the original owner to the exclusion of other options, maybe not so. Might depend on the interim contributions. If it was me, I'd want the quid-pro-quo.
One snag is that the original owner needs to have the cash on tap to do the buy-back. To avoid temptation, that may mean banking it at a pathetic interest rate. Can't have cake and eat it too.
If you're setting up the syndicate, you can decide the rules. It's then up to the buyer if they like them or not.
I did something similar with a permit group, such that they could only sell the share back to me, but they could also do that at any time and would get their original capital back.
I know somebody who got bitten recently as he couldn't buy back the share in the aircraft that he had built when he had to relocate for work reasons. The partner concerned refused to cooperate.
The main advantage of a syndicate is sharing the fixed annual costs. Depreciation of capital costs is relatively a much smaller consideration unless the aircraft is almost new and factory built.
If you reduce the risk factor for a potential partner it can make the deal quite attractive for them and compensate for the freedom to sell their share on an open market.
