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 Those who are not in compliance may receive fines or have their Delaware registration rescinded.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.
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There are 6 comments left for Protect Your Boat in an LLC
Riad Akkari said: Wednesday, June 7, 2017Hello, I am an EU citizen, currently residing in Canada and am interested in purchasing a boat in the middle east while using a LLC registered in Delaware. I plan to keep the boat in the middle east and have it cruise the Mediterranean waters including EU waters. Is this a feasible option? thank you for your time.
HBS Staff replied: Thursday, June 8, 2017Delaware LLCs can conduct any lawful business activity. We’ve worked with many clients who have formed Delaware LLCs to hold many different types of assets, such as boats, cars, planes, real estate, etc., all over the world. You can read more about protecting your boat in an LLC here: https://www.delawareinc.com/asset-protection/boat-owners/
Feel free to call, email or Live Chat with us for more information and/or to form your LLC.
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