Corp/LLC ownership

[Steve]

Does anyone on this board own their boat through a corporation or LLC? I've been investigating this option but haven't found much information on it. Any comments for/against?Thanks,Steve

 

[Ken Cobb]

Legal issues

If you own your boat alone, and use it just for fun, there is no reason not to have it in your own name. Obviously you want enough liability insurance on it, too.If you own the boat with others, then some kind of formal joint ownership like a partnership or corporation enables efficient selling of shares in the boat, and enables people to be bought out if they want to leave. Joint ownership of a boat, even by a non-married couple, can be very dicey on such issues without a formal agreement.Finally, if the boat is used a lot in connection with business, then it might be appropriate for it to be owned by that business and to be put in the name of the business, whether that business is an LLC, partnership, or corporation.

 

[Rick]

Corporation/LLC

Another reason for a reasonably wealthy boat owner to put the boat under a corporation as the corporations sole asset is to limit the liability. Insurance alone is not enough to limit an individuals risk. Having the boat in a corporation theoretically limits liability to the value of the boat and (any) other assets of the corporation.Hope that adds something to your thought process.Rick

 

[Steve]

Not Really, Rick....

The only way corporate ownership would shield you from liability for damages/injuries in an accident would be if the boat took itself out without your permission. Otherwise, an owner/captain will always have liability issues to deal with, corporate ownership or not. Carry enough insurance!

 

[Rick]

Corrections

Hi Steve:That is true that the Skipper might have liability...but so would the President of a Corporation in that case.I would think this point is debatable and would be interested in a legal opinion. Are you an Attorney?However, the Corporation would be even more effective should your boat break loose during a storm (hurricane) and cause lots of damage.All opinion....of course I have not yet discussed this with my attorney...Thanks for your rebuttal.Rick

 

[Steve]

Re-Corrections

Rick,1. No, the President of a corporation generally does not have any personal liability for debts of the corporation.2. In your hurricane scenario, again corporate ownership wouldn't shield the owner/skipper from liability, since liability would only arise in the event of a negligent act (e.g. not securing the boat properly) and only a person can commit a negligent act, not a boat. In the absence of a negligent act, no liability would attach.3. Yes, I am an attorney, but not a maritime specialist.4. Again, the best advice to the original question is to carry sufficient liability insurance.

 

[Ken Cobb]

Follow-up

I am also an attorney, which you could probably tell from my original post below. I am also unimpressed with the corporate shield from liability argument, precisely because the owner in his individual (and shareholder) capacity would be doing the things that might be considered negligence. Carrying more insurance is simpler and safer than relying on a legal strategem that might not work anyway.