Asset Protection - Yacht
Protect Your Yacht with a Delaware Corporation or LLC in 24 Hours
Yacht Advanced Internet Offer - $365.00 Package includes:
- Free Name Search
- 24 Hour Overtime Processing
- All State Filing Fees
- Certified Copy of Certificate
- Delaware Registered Agent fee
- Processing of SS4 for EIN
To register your boat in the state of Delaware Click here for information
Purchasing a New or Used Yacht? Why Should I Buy My Yacht in a Delaware Corporation or LLC?
Are you aware that all of your personal assets are in jeopardy if you own your yacht as an individual or as a partnership. To shield yourself from total financial disaster take advantage of the limited liability offered by a Delaware Corporation or a Delaware Limited Liability Company. Owning an yacht in this manner can offer you asset protection, privacy and tax savings.
Delaware is recognized as having a favorable tax climate. Delaware has no sales tax, personal property tax, intangible property tax or stock transfer tax. Additionally, no Delaware corporate income tax is assessed for income derived outside of the State of Delaware.
Note: It is important to understand that sales tax shelters are situational. Many states have "user taxes" and the like. One should consult with a legal or tax advisor to determine if a tax on a yacht will be due in the State in question.
When initially purchasing the vessel a sales/use tax may be due in the state they are actually keeping or using the vessel. The advantage of purchasing the vessel as a corporation truly comes into being when they opt to sell the vessel.
What are the advantages of selling the stock and assets of the corporation or LLC in lieu of the sale of the vessel?
In most cases, the prospective owner will have to pay a sales tax again on the purchase of the vessel. With this in mind from the outset, not only will the prospective owner derive the advantages of ownership as a corporation, when the vessel is subsequently put up for sale, the owner has the flexibility of selling the vessel as an asset of the corporation or selling the entire corporation of which the vessel is an asset. The latter circumstance is accomplished by simply transferring the shares of stock in the corporation over to the new owners.
This arrangement can be very attractive to the prospective purchaser because title to the vessel has not changed hands since it is still registered to the corporation. Therefore, no sales tax may be assessable on the transfer, and, no re-registration costs are incurred.
In fact, an additional savings occurs because the vessel does not need to be re-documented with the US Coast Guard or State Registered.
To protect yourself and your family you might want to own your yacht as a corporation or an LLC.
What is US Coast Guard Documentation?
Documentation is the national form of registering vessels. It is handled by the US Coast Guard and establishes unquestionable ownership and acts as the vessel’s passport in foreign waters. Documentation is required for the operation of vessels in certain trades and serves as evidence of nationality.
Boat Documentation Provides :
- Conclusive evidence of nationality for international purposes
- Unhindered commerce between the states
- Admits vessels into certain restricted trades, such as coastwise trade and the fisheries
- Establishes an internationally recognized maritime title for the vessel
- Acts as the vessel’s passport in foreign waters.
Fishing Vessels, Cruise Ships and Boats For Hire Must Be Documented With The USCG.
Once a vessel is documented there are no further fees to remain a documented vessel. However the documentation must be renewed on an annual basis. A documented vessel is exempt from displaying state numbers on their hull. However, all documented vessels must comply with the laws of the state in which they are operated. States may require documented vessels to be registered (but not numbered) and to display state validation showing that they have complied with the state requirements.
Most banks require that a vessel being financed be documented and provide them with a First Preferred Ships Mortgage recorded with the US Coast Guard. Vessel financing has been enhanced through the availability of preferred mortgages on documented vessels.
Requirements for Documentation
- A vessel must measure at least five net tons
- It can be owned by either an individual who is a citizen of the United States or acorporation in which 75% of the directors are American Citizens
- Usually a vessel 25’ in length can qualify for documentation
- The tonnage is determined by volume of the vessel, not by how much the manufacturer says the vessel weighs
Benefits of Documentation
- Documentation allows for easy entry into foreign ports.
- The chain of ownership of the vessel is maintained in one registry, a registry of history, pride, tradition and prestige.
- Documentation facilitates the sale of a vessel, particularly when financing is involved
Official Number Marking Requirements - How Do I Mark My Boat?
OFFICIAL NUMBER (NO.)
The official number assigned to documented vessels is always preceded by the abbreviation "NO." This must be followed by the number assigned and must be marked in block-type Arabic numerals at least three inches high on some clearly visible interior structural part of the hull. The number must be permanently affixed so that alteration, removal, or replacement would be obvious and cause some scarring or damage to the surrounding hull area.
The name and hailing port of a recreational vessel must be marked together on some clearly visible exterior part of the hull, usually the stern. On a commercial vessel, the vessel name must also be marked on the port and starboard bow and the vessel name and the hailing port must also be marked on the stern. The "hailing port" must include both a place and a State, Territory, or possession of in the United States. The state may be abbreviated.
All markings may at least four inches in height, made in clearly legible letters of the Latin alphabet or Arabic or Roman numerals.
What is a First Preferred Ship Mortgage?
A preferred ship mortgage is a mortgage that is given status as a maritime lien. many financial institutions require vessels that are eligible for documentation to be documented and to have preferred ship mortgages recorded against them. The owner of the vessel is prohibited from making certain changes in documentation such as change of vessel ownership, name and hailing port without the consent of the mortgagee.