December 1, 2021
Planning to Sell Your Business? Here’s What to Do With Your Company Jet
Consider the Legalities of Owning a Private Jet and Make a Contingency Plan in Advance
Sales. Mergers. Acquisitions. They’re commonplace in the business world, regardless of your industry. Some people consider them inevitable.
If your company is changing hands, or if you’re making a wise move by creating a contingency plan for your business on the chance that it does, then you’ll need to ensure you’re including a plan for the company aircraft or fleet. This is particularly important if your executive leaders or company owner use it for both business and personal use.
Your options are:
Include the aircraft in the sale as an asset of the business
Sell the aircraft to a third party prior to selling the business
Transferring ownership to yourself
Before deciding what to do, always confer with your lawyer, aviation council, and tax adviser about any implications.
Opting to Sell the Aircraft Along with the Business
If the sale conveys all company assets, generally this includes used private jets. While in talks about the purchase, request clarification about what the sale will include. Your lawyer should ensure the fate of your business jet is specified and documented as part of the transaction.
Choosing to Transfer Ownership of the Business Jet from Company Asset to Personal Asset
Without thoughtful planning, transferring ownership of your jet from your company to you can become expensive. And owning a private jet isn’t without expense.
Before deciding to transfer ownership to your personal assets, work with an aviation industry expert to create a budget for the first five years of ownership, considering all fees and necessary purchases based on how often you’ll fly. These costs include taxes, insurance, ramp fees, hangar fees, flexible costs, crew costs, and more.
You’ll need to talk to your tax adviser about the implications on your taxes if you purchase the private jet from your business or take a distribution of the plane from your business. If you opt to purchase the jet from your business, you’ll need to have finances available for the purchase, or secure a loan for it.
To help reduce overall costs, you may opt to lease the used private jet back to the business, or allow others to charter your aircraft through a charter or jet card company. Either way, you’ll need to work with a lawyer to negotiate a contract with these parties to address financial and usage issues, including flight scheduling priorities, limitations on cycles per year, cost of the lease or charter, and the terms of lease termination.
Before starting the process, ensure all your arrangements satisfy the Federal Aviation Administration’s regulatory requirements for leased aircraft.
Deciding to Sell Your Business Jet to a Third Party
Prior to selling your business, you may wish to liquidate certain assets and apply money received from the process toward your debts. A business jet can provide a significant payment toward the money your company owes to creditors.
Selling a used private jet is a process that can take at least a year, which is why advance planning is vital. And not only will the process take a while, but you’ll also want to identify a broker or dealer to negotiate the transaction for you and guide you through each step.
Ideally, the best way to put a used private jet for sale on the market is to work with an International Aircraft Dealers Association (IADA) Accredited Dealer. IADA Accredited Dealers vow to follow a stringent code of ethics that puts their clients first, over profits.
They can only earn accreditation after demonstrating years of success in the industry and receiving recommendations from other Accredited Dealers. You can trust them because they cannot be bought; Accredited Dealers can only accept commission from one party to the transaction.
When you decide to list your preowned jet for sale, the dealer or broker you work with will collect and verify the accuracy of information about your jet, and list it on AircraftExchange.com, the used private jet website only for IADA Accredited Dealers. Used private jet shoppers can rest assured that your jet listing is reputable because of who is managing the transaction.
Where to Find an IADA Accredited Dealer
Browse listings of every IADA Accredited Dealer in the world at AircraftExchange.com, where you can also find listings of private jets for sale. Shoppers search by manufacturer, model, or size, to see available aircraft.