Protect Your Boat in an LLC
It is becoming more and more common for boat owners to form a Delaware LLC in order to protect themselves as well as their boat. Oftentimes, people who own a yacht or boat charter it out for a fee.
Their boat may be in one city while they are in another, and their boat is often being operated by a person they have never met.
The liability concerns here are easy to see. A Delaware LLC can protect the boat owner from personal liability that may stem from any damage that can possibly occur, whether the fault of their boat or the operators of their boat at the time.
Sheltering a boat under a Delaware LLC also allows the owner to maintain his/her privacy. In Delaware, information about the members of an LLC is not required to be filed with the state, and is not on the public record.
The members of the LLC are shielded from any debts and obligations of the LLC as well. There can also be tax benefits associated with a Delaware LLC that holds an asset such as a boat. If this interests you, we encourage you to speak with a tax professional for the specifics on LLC tax benefits.
After the LLC is formed, The Delaware Department of Natural Resources and Environmental Control can be a good source of information on how to register your boat in Delaware. The DDNREC requires a bill of sale, a certificate of origination from the manufacturer, the boat type and length and the year the boat was constructed. You can contact the DDNREC office directly for the specifics.
To maintain a Delaware registration, there is a minimum amount of days the boat must be kept in the state of Delaware. DDNREC officers have ways of verifying this information, so it is important to stay in compliance. Those who are not in compliance may receive fines or have their Delaware registration rescinded.
If you would like to protect your boat in an LLC, Harvard Business Services, Inc. can help, and we will not need any of your boat’s information. In fact, some of our clients even form a Delaware LLC before purchasing a boat. The only questions we will need to ask are:
- the name of the company
- your basic contact information (which remains private)
- the names of the initial LLC members (which also remains private)
Please feel free to contact us with any questions about protecting your boat in an LLC. You can call Harvard Business Services, Inc. at 800-345-2677 for assistance.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.
More By Devin Scott
There are 6 comments left for Protect Your Boat in an LLC
caner said: Wednesday, September 29, 2021Dear Sir/Madam I am from Turkey, and next week i will be buying a 2nd hand sailing boat from greece which is now under greece flag. So i need to know what must be done to form a company in Delaware, also to register this boat in that company? Would you please tell me the details including the prices? I have looked for your packages but still not sure about which to select and what to do for boat registration. Waiting for you reply Thank you anyways Best regards
HBS Staff replied: Wednesday, September 29, 2021Hello! Thank you for reading our blog. A member of our sales team will be reaching out to you to discuss this further.
AYLMER P GRIBBLE said: Tuesday, May 18, 2021OUR DOM REP BUYERS LOOKING TO BUY A US FLAG VESSEL THROUGH A DELAWARE COMPANY TO BE FORMED AND REGISTER THE VESSEL UNDER US FLAG. CAN YOU ASSIST WITH THIS PLEASE?
HBS Staff replied: Tuesday, May 18, 2021Hello Aylmer, thank you for reading our blog. We are happy to assist with forming the Delaware company for your vessel. We will contact you to help answer your questions.
Engin BAYDAR said: Wednesday, February 10, 2021Dear Sir/Madam I am from Turkey, and next week i will be buying a 2nd hand sailing boat from Crotia which is now under Crotian flag. So i need to know what must be done to form a company in Delaware, also to register this boat in that company? Would you please tell me the details including the prices? I have looked for your packages but still not sure about which to select and what to do for boat registration. Waiting for you reply Thank you anyways Best regards
HBS Staff replied: Wednesday, February 10, 2021Hi Engin,
Thank you for reading our article. We are happy to assist you with your questions and we will have a sales representative reach out via email to help answer your questions.
Piero Damiani said: Wednesday, May 15, 2019I am a British citizen about to purchase a British flagged sailing boat located in Turkey. Interesting in finding out more about protecting the boat in a Delaware LLC and re-flagging the boat under. Delaware registry. Is it possible if the boat is not in the US
HBS Staff replied: Wednesday, May 15, 2019Piero, while the process of registering your boat with the state of Delaware is very simple and can be completed online, please be aware that state regulations require that your vessel be registered in its “State of Principal Use.” This refers to a state on whose waters a vessel is used or to be used most during a calendar year. Delaware regulations state that if Delaware is the “State of Principal Use,” the vessel must be used, docked, or stowed on the waters of this State for over 60 consecutive days every year.
Nancy said: Friday, April 20, 2018Can the ownership of a boat be transferred from one Delaware's Inc to another Delaware Inc or Corp?
HBS Staff replied: Friday, April 20, 2018Yes. In order to do so, you'll need to work with an attorney and/or tax professional.
1 | 2