Give Your Business the Best Chance of Success in 2019
2018 is nearly in the books. Businesses are busy winding up year-end obligations, professionals are preparing for the New Year holiday, and managers across the diverse aviation industry are making plans for 2019. While financial considerations tend to be front and center at year-end, it is also important to make sure you are taking the steps necessary to protect your business’s legal interests and give yourself the best chance of success in 2019.
Everyone in the aviation industry, from the manufacturers of commercial and corporate aircraft and components, the nationwide sales and distribution network for both new and used aircraft, maintenance personnel, FBOs, investors, leasing and management companies to the pilots who fly passengers around the world, can benefit from taking a few moments to ensure their legal ducks are in a row.
To help, FMJ has put together a short checklist of items to review with your managers, staff, business partners, and stakeholders to make sure your business avoids legal and regulatory trouble in the New Year:
- Medical certifications for all pilots – (14 CFR § 61.23). Create a list of all pilots who need to re-certify with the FAA and create a matrix of deadlines for completion of medical exam and filing required paperwork. Remember, scheduling an exam with a certified examiner, awaiting the report, and completing the necessary paperwork takes time. Get an early start and make sure all pilots meet their deadlines. In the event one of your pilots inadvertently missed the deadline or scheduling issues prevent timely compliance, there may be options to avoid any issues with the FAA. Contact one of the FMJ aviation attorneys immediately and consider filing a NASA report to protect your license.
- Tax law planning. The tax laws are always changing, especially for businesses that operate across state and international borders. When your business changes, you make another business, or acquire an aircraft, make sure you know the implications before you close. Could there be sales or use taxes that apply or is there an appropriate exemption? Is that aircraft eligible for bonus depreciation? Consult with your tax, accounting, and legal professionals to make sure your business is properly structured to maximize your tax position and limit your tax liability.
- Insurance. Insurance. Insurance. By far the least exciting, but definitely one of the most important, things any business in the aviation industry can do to protect its bottom line is to make sure it is adequately insured with the correct types of coverage to protect all aspect of its operations. When something goes wrong, the costs of repair, loss in revenue, and ensuing litigation can be staggering. Making sure you have the right coverage is paramount, but reading and understanding insurance contracts can be a daunting task. Check your insurance documents and make sure all of your policies have been renewed for 2019. Also, take the time to go through your coverage and all of the exclusions in those policies with your broker. Ask questions about coverage for first-party property damage and personal injury, third-party liability and indemnity, products liability, employment practices, errors and omissions, directors and officers, and workers’ compensation insurance. Explain all aspects of your business operations to your broker, run through scenarios, select the best policies, and get written commitments that your business is adequately covered.
- Employer-employee relations. All businesses which have employees (from one to 100,000) have the potential for employment law compliance problems issues. A broad regulatory framework of local, state, and federal regulations control many aspects of the employer-employee relationship and a little planning can go a long way to avoid issues down the road. Make sure your employees are properly classified (exempt/non-exempt, employee/independent contractor), update your policies and employee handbook (or create one) to reflect new changes in the law, make sure employee benefit plans are in place, and all disclosure requirements are met. FMJ’s employment lawyers are here as a resource for business owners, executives, and HR professional to make sure these things are done right.
- Contract renewals and terminations. The business world is always changing and keeping on top of all of your written contracts with customers, vendors, and business partners can be the key to maintaining strong relationships and ensuring flexibility in your operations. Identify all written contracts to which your business is a party and keep copies of those contracts in a single file or folder for easy reference. Make a note of the terms of those contracts, the date of expiration, whether the contract automatically renews or requires a separate renewal, what options you have to renew or amend, and the deadline for canceling contracts when the parties can’t agree otherwise. The language of the contract is what governs the relationship between the parties. Miss a renewal deadline and you could be left without important contractual protections. Miss a cancellation deadline and you could be stuck in a bad business relationship for another year. Stay organized. Keep track of deadlines. And avoid legal disputes that could interrupt your business operations.
We look forward to another year serving as your legal advisors and working hard to add value to your business. Please contact any one of our lawyers us if you ever need assistance. We at FMJ wish you all the best in 2019!