LLC Must Qualify as a Citizen of the United States
Aircraft owners often hold title to their aircraft in an LLC because there can be many benefits to doing so. However, in order to register an aircraft in an LLC, the LLC must qualify as a citizen of the United States under Title 49, U.S.C., 40102(a)(15). This law requires: (1) the LLC to be organized under the laws of the United States or a state, (2) at least two-thirds of the managers, managing members, or managing officer to be citizens of the United States, and (3) at least 75% of the voting interests to be owned or controlled by persons that are citizens of the United States.
If an LLC includes a member or manager that is also an LLC, each such entity or layer of membership must also qualify as a citizen of the United States.
One of Two Documents Must be Filed to Support the LLC’s Citizenship
To prove that an LLC meets the U.S. Citizenship requirement, the FAA requires LLC to file one of the following two documents: (1) a copy of the LLC’s organizational documents, or (2) the Statement in Support of Registration (“SSR”).
1. LLC’s Organizational Documents
The first option is to file a copy of the document evidencing the organization of the LLC (e.g., Certificate of Formation, Articles of Organization, or Operating Agreement), which must include the name of each of the members and clearly state whether management of the LLC is vested in its members, in a manager, or in its officers. The citizenship of each member, manager or officer is also required and may be provided. This option is less utilized because most companies and clients wish to keep these organizational documents confidential.
2. Statement in Support of Registration
The second and more commonly used option is to file an SSR. The SSR is a written statement by the LLC stating that it does in fact qualify as a U.S. citizen. The SSR must include the following information:
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- Full name of the LLC
- State of organization
- Date of organization
- Names of each member of the LLC and their type of entity (e.g., individual, LLC, corporation, or partnership)
- Whether the LLC is managed by members, managers, or officers, showing the title that will be used to sign all documents
- Names of each of the managing members, managers, or officers of the LLC and their type of entity (e.g., individual, LLC, corporation, or partnership)
- Whether the members, managers, or officers may act independently, noting that a non-citizen member or manager may not act independently in a management capacity
- A description as to how each legal entity within the LLC structure supports a determination that the LLC is a citizen of the United States
If an LLC includes a member or manager that is also an LLC, one of the above two alternatives must also be provided for such LLC. In other words, in cases concerning a multilayered LLC structure, the applicant LLC must prove to the FAA how each legal entity within the LLC structure supports a determination the applicant LLC is a citizen of the United States. This means that parent, member, or manager entities may also need to file SSRs.
Until the FAA receives all relevant SSRs (or organizational documents) proving the LLC is a citizen of the United States, the FAA will not register the aircraft.
In addition, an additional objective of the SSR is to prove to the FAA that the person signing the application for registration with the FAA actually has the authority to do so. If managing and signatory authority on the SSR and the application for registration do not match, the FAA will reject the application.
Registrant Must Notify FAA of Management Changes
Finally, if the management of the LLC changes at a later date (e.g., originally managed by the members, but now by a manager), the LLC must provide written notice of the change to the FAA.
Registering an LLC with the FAA can be tricky. We regularly help aircraft owners do so. Please call us at the number below or email us at Counsel@BizjetLaw.com if you would like assistance.