How to buy vessel from LLC?

[KittyB]

Hi, all,
We are trying to get some advice on purchasing a boat from an LLC. We reached an agreement for purchase for a Catalina 30 yesterday, but it now turns out the boat is owned by an LLC. We're not sure how to proceed, and are loathe to start bringing lawyers into this. The purchase price is less than $20K. We're imagining that we need to see some kind of document from the seller that proves he's authorized to dispose of an asset within the LLC, but not sure what this document should be.

Beyond that, we've never bought a boat before (we own one, but we built it, and titling that was an entirely different kind of craziness). So, is there a standard contract or agreement for sale that you'd recommend, or is the process very much like buying a car. I should mention that the transaction will occur in WA state.

Thanks for any and all advice,
Kitty

 

[tommays]

If the boat is CG documented the papers should show who owns the boat and WHO can sigh it over

If its state registered it should show who owns it But it becomes more of a local state knowledge issue

 

[Peggie Hall HeadMistress]

Contact your sec'y of state office

All types of corporations are registered with the state (so the state can collect taxes from 'em), and those documents name the officers of the corporation. They're public documents...you might even be able to pull 'em up online if you know the URL. So contact your secy' of state office and they can give you the info you need.

 

[Allan Frey]

Depending on state law, you may have to have the president sign and the treasurer sign attesting.

allan

 

[Bryce22345]

LLC

We use LLC's all the time in our real estate transactions. can't imagine its different for a boat. the members of the LLC will need to sign a doc authorizing the the managing member to sell the boat. there may be provisions in the LLC agreement that may say only require a 50%+ majority of the members to authorize the managing member to sell it to you, or it could require all to sign authorization. its been pretty much the same for all the states in the NE we operate in. as Peggie said you can get a copy of the articles of organization and the most current annual report which will show the managing member from the Secretary of States office. in many states you can do that on-line. any standard P&S will work to tie the boat up. shouldn't be anything that scares you off.

 

[KittyB]

Thanks, all. Very helpful and reassuring. Appreciate your help.
Kitty

 

[dparilla]

Incidentally, what's the boat's name? I worked with an LLC owned Catalina 30 a few years ago.

 

[Joe]

I would think a simple call to your vehicle local licensing office might provide an authoritative answer. Here's a list for the Seattle area: https://fortress.wa.gov/dol/dolprod/vehoffices/DisplayOffices.aspx?County=17

In any event, setting up an escrow (third party administrator) will insure that you acquire legal title before the money is released to the seller. (along with other conditions stipulated in your contract.) Much like purchasing a house.

 

[kenn]

Pardon a question from north of the border, - what benefits are there for US owners to create an LLC for boat ownership, and what extra pitfalls would it create for the purchaser?

My mind runs to the negative - it's some sort of tax shelter, owners are limiting their exposure to risk... why? so they can walk away unscathed in the event of a big accident, or from debt? I don't see other advantages to LLC, over simply an ownership agreement and sufficient insurance.

Thanks.

 

[gpd955]

Pardon a question from north of the border, - what benefits are there for US owners to create an LLC for boat ownership...

Thanks.

Could have been a multitude of things. A way for a business to entertain clients or reward employees. Possibly a business that held sailing classes or rented sailboats for charters or even conducted short sunset cruises or the like. Maybe even a repo.