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 Those who are not in compliance may receive fines or have their Delaware registration rescinded.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:
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.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 2 comments left for Protect Your Boat in an LLCNancy said: Friday, April 20, 2018
Can the ownership of a boat be transferred from one Delaware's Inc to another Delaware Inc or Corp?HBS Staff replied: Friday, April 20, 2018
Yes. In order to do so, you'll need to work with an attorney and/or tax professional.Riad Akkari said: Wednesday, June 7, 2017
Hello, 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, 2017
Delaware 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.