Question to Ask Before joining Partnership

cocolos

cocolos

Pre-takeoff checklist
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cocolos
As it says in the title what are some questions that I should ask about the partnership and about the airplane?
 
I think there's a good document on the AOPA site regarding partnerships ... sorry I don't have time to go chase it down
 
The first question is whether it's really a partnership vs. some other form of co-ownership.

cocolos said:
As it says in the title what are some questions that I should ask about the partnership and about the airplane?
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Is it a registered LLC? That absolves you from anything your partner does that might result in a court action. In these lawyer heavy days this is a must IMHO. (And my lawyer wife agrees)
 
  1. Multiple read-throughs of the partnership or joint owner agreement with a microscope and pair of tweezers. Are there any areas where you'd be hanging in the wind if one of the other partners vaporizes and isn't there to hold up his end financially or legally
  2. Review of the financials. Is there an adequate reserve fund for planned and unplanned big ticket items?
  3. What are the outs? If you want out, how does that happen? If they want out, how does that affect you?
  4. If this group has been around for a while, how is your buy-in to be "Spent"? Is replacing a departing partner? Will it be buying new toys or expanding the cash reserve?
  5. How are long distance and pricey maintenance needs handled?
 
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I'd spend a lot of time talking with the partners to see if my goals of the partnership match up with theirs. I don't want to be the guy who likes the plane as is and then be partnered with others who want to, and can afford to, put another $100K into it.
 
Matthew said:
I'd spend a lot of time talking with the partners to see if my goals of the partnership match up with theirs. I don't want to be the guy who likes the plane as is and then be partnered with others who want to, and can afford to, put another $100K into it.
Click to expand...

Good Point.

"We got this plane from a fellow known as John Baker. What we plan to do with the $40k buyin from you is..."
 
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