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Glider Ownership

Excerpt from Everybody's First Gliding Book by Bob Wander
Used by permission from the copyright holder (Bob Wander)
The full publication is available at BobWander.com

Sole Ownership


Just about everyone who starts gliding lessons has a dream of owning a personal sailplane. I know I did, and I have owned a number of them over the years. Each was very satisfying to own, work on, and of course to fly. If you have decided to become the sole owner of a glider, more power to you. Shop carefully, get expert help to assess the condition and suitability of any aircraft that you might be interested in, and have fun!

Jointly Owned Glider Opportunities
The main obstacle to fulfilling the dream of glider ownership is cost (although in some cases spousal disapproval ranks pretty highly...!). Aircraft are not particularly cheap to buy, and once bought there are some significant costs that must be borne in order to maintain, insure, and operate the aircraft.

The best way that I know to minimize this problem (short of a really big Powerball win) is to divide the cost among several owners. After all, most gliders fly a relatively small amount of flight hours annually. Why not take on an amiable partner and cut your costs in half (or in thirds, if you decide that joint ownership is best accomplished with three players rather than two). 

The following text may inspire you to give joint ownership a try, through the vehicle of incorporation. It is modeled on an actual corporation that owned a glider very successfully. The by-laws provide the framework for valuing the glider, who can fly the glider, and how the assets of the corporation shall be managed in the future. The joint authors anticipated a number of contingencies that could arise and wrote them into the bylaws. During the years of joint ownership of the Corporation, many of the anticipated contingencies did actually arise, and the by-laws guided the owners through the contingencies very well. Because the by-laws spell things out, each owner of the Corporation knew exactly what was expected of him.

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Corporate By-Laws of (fictional) OurGlider Corporation
This agreement between Daryl Bristan  and Regal Sloane is for the purpose of forming a Minnesota Subchapter-S Business corporation for the purchase and ownership in unequal or equal shares of a glider, trailer and accessories for sport aviation use.

This agreement constitutes the By-Laws of the OurGlider Corporation, a Minnesota corporation.  The officers and sole shareholders of the corporation Daryl Bristan  [President] and Regal Sloane [vice-President].  Each of the officers has executive authority to conduct the business of owning and flying the glider(s) owned by the OurGlider Corporation, a Minnesota corporation, including execution of whatever instruments may be necessary in the normal course of business.  Stock certificates have been issued to the shareholders respectively in the number of shares of their initial investment in the corporation, at a price of $1.00 per share.

Corporate Asset Use Agreement
During the soaring season (April through October) the glider shall normally be kept at Faribault Airport, Faribault, Minnesota.  The aircraft may be temporarily relocated to other airfields for events or to access tow service, provided the shareholders agree on its movement and the duration of the move.  A change in the normal location of the aircraft must be mutually agreed upon.

Between seasons the glider will be stored at a location agreed upon by the shareholders. Storage and tie down costs, both during the soaring season and between seasons will be paid by the OurGlider Corporation.

The shareholders of the corporation have first priority in the use of the aircraft. Each shareholder may reserve the glider for his own use by prior scheduling with a designated Scheduler. In such an event he will notify the Scheduler by 4 PM the day before he wishes to use the glider. The Scheduler will notify the other people scheduled that the glider will be unavailable for general use during the reserved time period.

The OurGlider Corporation requires that pilots flying Corporation-owned glider(s) must be a Private or Commercial Pilot with Glider rating in order to fly the glider as Pilot-In-Command. Pilots will be required to have an approved CFI-Glider checkout in the glider prior to solo. The CFI-G checkout will be completed by an instructor who has experience flying the type(s) of glider owned by the Corporation. There may also be additional requirements (flight time experiences, etc.) imposed by the Corporations’ insurance policy. The Scheduler shall maintain a list of pilots qualified to fly Corporate owned glider(s).

Pilots will be restricted to a maximum flight duration of two hours’ of flight time per launch, unless other arrangement has been made in advance with the Scheduler.  Pilots will be responsible for returning the glider in a timely manner. Corporate-owned glider(s) will be equipped with an approved VHF aviation transceiver.
 
Insurance
The aircraft shall be insured during the soaring season with hull and liability insurance with the following coverage:
Liability coverage:  $1,000,000.00
Hull and trailer insurance:  $25,000.00
Between seasons the aircraft shall have insurance to cover it while stored. Deductible shall be in the amount of $250.00 for all insurance purposes. For purposes of insurance the aircraft and trailer shall be valued in the amount of $25,000.00.  This sum and other terms of the insurance are subject to change on an annual basis prior to April first of each year by mutual consent of the shareholders.  If mutual consent cannot be reached the terms will be as in the previous year.  The insurance premium will be paid by the OurGlider Corporation.

In the event of damage to the aircraft or accessories, the shareholder who causes the damage, either while flying, while trailering or through negligence (i.e. improperly securing the aircraft or trailer, etc.) shall be responsible for any repair costs not covered by the insurance.  That shareholder shall also be responsible for the timelines of the repairs so that the other shareholder is deprived of the aircraft's use for the least reasonable amount of time.  In no case shall the timeliness of the repairs compromise the integrity of the aircraft.  All repairs to the aircraft must be of the highest quality and be performed by, or supervised by, an FAA-Authorized Inspector (AI) mechanic whose services are agreeable to all shareholders in the Corporation. 

The cost of repair of damages that result from an “Act of God” shall be shared equally by the shareholders.
Any changes to the aircraft, i.e. structural changes, instrumentation, radios, cockpit layout, etc. which are permanent in nature will only be undertaken with the unanimous consent of the shareholders.

The aircraft shall be maintained in excellent, airworthy condition.  Required annual inspections shall be performed by a mutually agreed upon certified mechanic.  Use of the aircraft shall at all times be within FAA regulations regarding annual inspections and compliance with Airworthiness Directives,  without exception.  All work done on the aircraft which must be performed or supervised by a certified mechanic as defined by the Federal Aviation Regulations shall be performed or supervised by such a mechanic without exception.  Expenses for annuals and routine maintenance shall be paid by the OurGlider Corporation.

Each shareholder shall make reasonable accommodations to the other for use of the aircraft.  This may mean that one shareholder may have exclusive use of the aircraft for a particular time period or for an aviation event at another airfield.  It is, however, the intent of this agreement that use of the aircraft shall be shared equally between shareholders.

Conditions Of Sale Of Stock Or Assets
In the event of any yearly taxes owed by the Corporation, the tax amount would be split between the shareholders according to the income received. 

In the event that any of the accessories acquired with the aircraft are to be sold, the sale price will be mutually agreed upon by the shareholders, and the sale proceeds split between the shareholders according to the number of shares of stock held by each of the shareholders, as a stock dividend.

In the event the aircraft is sold, the value of the aircraft is as valued for insurance purposes as previously stated.  This value shall be re-evaluated annually prior to April first.  The valuation of the aircraft shall be stated in writing, dated and signed by the shareholders, each to receive a copy.  The value last written shall remain in force until another valuation is stated in writing, even if it is after the April first date for re-evaluation.  Sale proceeds are to be distributed according to the number of shares of stocks held by each of the shareholders.

In the event one shareholder chooses to sell his stock in the corporation to the other shareholder, stock value per share will be the price determined as in the paragraph last above divided by the total number of shares outstanding.

In the event one shareholder chooses to sell his stock in the corporation and the other shareholder cannot or elects not to purchase it, then a third party who is acceptable to the remaining shareholder(s) shall be allowed to purchase the selling shareholder's stock.  The remaining shareholder(s) shall be given 60 days from the time that the selling shareholder notifies him of the selling shareholder's desire to sell to find an acceptable third party purchaser, it being the duty of the remaining shareholder to find such a third party.

In the event one shareholder chooses to sell his stock in the corporation and the other shareholder cannot or elects not to purchase it, and an acceptable third party purchaser cannot be found within 60 days as above stated, the assets of the corporation will be offered for sale on the open market.  Selling price shall be the most recent written valuation.

In the event of the death of one shareholder, the other shareholder shall have one year to purchase the deceased shareholder's stock in the corporation from the decedent's heirs.  The surviving shareholder shall be solely responsible for all of the costs of ownership during that year.  However, the decedent's heirs will be entitled to a refund of any portion of prepaid expenses, i.e. insurance, storage, etc.

In the event of the sale of either shareholder's stock in the corporation to the remaining shareholder or upon the death of either shareholder, then this agreement shall be null and void, except that the remaining shareholder's corporate authority shall continue.

In the event of the sale of either shareholder's stock in the corporation to a third party, then the selling shareholder shall be held harmless from the continuing acts of the corporation.  The terms of this agreement will inure to the buyer as if the buyer "stepped into the shoes" of the seller.  This agreement may be come null and void only upon the mutual consent of the shareholders.

Signed,

_____________________                                     ________________________
Daryl Bristan , President                                  Regal Sloane, Vice President

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These by-laws are provided as a simple guide to corporate ownership of a glider used exclusively for pleasure flying. If you decide to proceed, make sure that you write by-laws that will work for you and your fellow shareholders. Then ask an attorney to look over your work and offer suggestions as to how to perfect your by-laws. 

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