Creating an LLC for sailing charters

[Puesta del sol]

Looking for information on putting a sailboat into an LLC to run 3 hours sailing charters in Maryland

do I need to sell the boat to the LLC? Anyone know if Maryland will assess another 6% tax on the sale from me to the LLC

Thanks

 

[Ken Cross]

You should be able to lease it to the LLC I would think, or even lend it.

I'm not in your state and not an attorney.
Ken

 

[Peggie Hall HeadMistress]

Those, along with a bunch of others, are questions you should be asking your accountant and lawyer...and your insurance company to find out what impact it will have on your rates, or if they even cover "business use" of your boat, especially liability.

 

[jssailem]

You may also need a Captains License if you are taking paying passengers out on the boat. Your boat may need CG inspections to have it operated as a commercial vessel. Oh Boy lots of questions to ask and answer....

 

[markwbird]

I was just discussing this over the weekend with my racing homies. Apparently, some people do this for no other reason than to shield themselves from liability in the event that a guest gets injured. Seems paranoid but what do I know.

 

[Peggie Hall HeadMistress]

Apparently, some people do this for no other reason than to shield themselves from liability in the event that a guest gets injured.

It's not paranoia, it's smart. Incorporating exposes only the assets of the corporation, your personal assets are protected in the event of a lawsuit. Otherwise, it can not only cost you every dime you have or can raise now, but for the next 20 years.

 

[Don S/V ILLusion]

Caution - relying on legal advice from internet comments is always wrong. As one example, setting up a LLC does not automatically shield you as captain or owner from liability and the cost of liability insurance you carry but it does add the additional and not inexpensive cost of liability insurance protecting the LLC you must add.

 

[Bill Roosa]

I'm with Don. You are starting a business that potentially puts people's lives at risk. Get a lawyer

 

[Jackdaw]

Exactly. LLCs provide a measure of personal protection from financial (loss) liability, but nothing from other risks.

 

[jssailem]

Get a lawyer

 

[Crazy Dave Condon]

Why not ask another charter company in MD not in your area the pros and cons. If they are willing to help, that would be a good start but there is a lot to consider and the advice given by everyone so far is very sound. I use to rent sailboats and one thing you will need to consider is insurance and that is not cheap regardless whether you have or do not have an LLC> Each state is different regarding maritime law and then there are the federal regs as well.

 

[ifmdalvey]

Several points
Get legal advise for your state.
I have done exactly what you intend, in Maine
You must have at least a USCG 6 pack license at a minimum, if you intend charging money for the chartering, i got a 50 ton masters.
You require commercial insurance - this is expensive, for me, double the normal civilian premium and it can be harder to find.
The LLC is a very good idea, i would not run a business without going down that route.
If you limit the number of passengers to six or less, you do not need to have USCG inspected vessel. This is the origin of a six pack license.
Good luck, it isn't easy and the pax can be a PITA sometimes.
I operate as www.sailcasco.com

 

[Puesta del sol]

Thanks for the input - already working through all the lawyer end and insurance. The Maryland DNR is not as clear.

Will be reaching out to others in the area that are already doing this

 

[Gunni]

In answer to your question; Yes, Maryland has a hospitality / entertainment tax. Last time I saw it was the same as the sales tax. That means the state knows (or should know) that you are operating a charter. Get a knowledgeable attorney to make sure you are in compliance. Read your insurance policy, most exclude coverage for chartering.