The FAA prohibition is against "carrying persons or property for compensation or hire." This is completely separate from the issue of whether an experimental aircraft may be owned by a corporation.
For the plane to be part of the corporation in terms of whether its ownership was a "sham" or a "fraud upon the public," or otherwise against public interest, it is only necessary that the court find that its use was reasonably related to the corporation's actual business. This is not a high standard. For example, if a corporation were in the business of signs and graphics, or any kind of commercial graphics, then a striking paint job on an experimental aircraft--and the actual displaying of the aircraft, either flying or static--would almost certainly meet this standard. It is true that an individual can't just put his aircraft in a corporate name, observe the formalities, and expect the corporate veil to remain unpierced. However, I stress that if the aircraft is a legitimate part of the business, and if the corporate formalities (including local registration, proper bookkeeping, and corporate recordkeeping) are strictly observed, then corporate ownership affords valuable protection for a reasonable price. As far as "do-it-yourself" kits, most attorneys use some form of these kits themselves, regardless of how much you pay them. I myself keep standard, time-tested Articles and other filings in Word documents that can be "cut and pasted" on demand. At the $60 to $250 that it costs to incorporate, it would make no sense to avoid placing the aircraft under corporate ownership just because doing so is not a watertight defense. The fact of the matter is that, in most jurisdictions, it is not "extremely easy" to pierce the corporate veil in cases where the corporation was properly formed and run and the asset or activity at issue was a legitimate part of the business. The issue is usually moot, however, because this still doesn't protect the pilot (in experimental aircraft, almost always the owner) from his own negligence. Other examples of corporate ownership that would probably meet the corporate-veil "reasonable connection to the business" and still not violate FAR's include a writer who flies an experimental aircraft and writes articles about it and a businessman who uses the aircraft for personal transportation. Basically, under the FAR's, anything commercial can be done with an experimental aircraft as long as the owner or operator does not charge "compensation or hire." Significantly, this is different from Part 103's "recreational use only" provision, and shows that the FAA did not intend to preclude all commercial uses of an experimental aircraft. So aerial photography, paid sightseeing flights, carrying checks or other cargo, and banner-towing are out, because a charge is involved. In contrast, a person who is getting paid to attend a business conference in another city, and chooses to use his experimental aircraft for the flight, is not being compensated for flying the plane, but for attending the meeting. This is reinforced by the fact that the FAA has long allowed such flying to be done under a Private Pilot certificate. I suspect a creative thinker could therefore find many commercial uses for a plane that do not involve compensation or hire. This is a different standard from the IRS's "business use" requirement for deducting expenses. It is pleasant to contemplate, therefore, that even the expenses of owning an experimental aircraft may be deducted from corporate income (or even sole proprietor income) if the plane's use meets the normal standards of business use. However, plane owners, like boat and RV owners, should remember that, due to past abuses, the IRS will carefully scrutinize any business deduction involving a recreational vehicle. So we are dealing with three distinct and separate issues, one relating to a court's later determination of whether the aircraft's ownership was corporate or personal, the second relating to whether the FAR's permit any business use of an experimental aircraft, and the third relating to the IRS's allowance of deductions of experimental-aircraft expenses from income. As usual, not legal advice-- Max Hardberger
