Where to register my boat

[timover5969]

Be clear with your attorney and insurance company about this. Generally an LLC or corporation will not protect you from your own personal errors. In other words, if you are personally negligent, the entity is, in most cases, not going to protect you and your personal assets.

A corporation or LLC in almost any state is going to cost both up front and ongoing fees and expenses. Research with your accountant and attorney what the best venue is and how much it is going to cost on an ongoing baisis and think about if that money might be better spent on additional liability insurance. If you are serious about an entity, this is not something you want to set up and maintain using a self help process.


And in most cases, regardless of federal documentation, the boat is going to be property taxed where it spends most of its time.


I agree with Don's statement above. "Frankly, the last place I’d go for legal advice from strangers is a sailing internet site."

Prepare to jibe.

I am a commercial insurance agent by profession so I will make sure that is covered. I will have a commercial insurance policy in my LLC's name, and by default all members of an LLC are covered as insureds with no severability. I may even list myself as an additional insured - generally a $50 charge, just to make sure there is no question if I am covered or not. Also, when I am teaching I am covered by ASA's policy. Having an LLC is a last line of defense to cover my ass. The expenses of maintaining a single member LLC are minimal as the profit/loss just passes on to my personal taxes (according to my accountant) and the formation costs are around $100. Consulting an attorney to figure out what is the least expensive way to go is kind of defeating the purpose - I have never consulted an attorney for anything without getting a $1,000 bill at a minimum. What I'm really asking is what the regulations are pertaining to registering the boat as I had no idea and neither did my accountant. From what I am gathering, I am pretty much thinking I should document the boat and I'll probably form the LLC (or possibly S Corp) in Florida. I've created both types of entities in the past and it is pretty straight forward, but those were entities located in NY, doing business in NY and owned by a resident of NY. This case isn't as straight forward and I appreciate everybody's input.

 

[timover5969]

Certainly a boat owned by an entity can be federally documented. There are requirements though that the entity has to be owned at least 50% by a US citizen, in some cases 75%.


Not really true. A corporation is taxed as a corporation. A whole different tax structure. Unless of course it elects to be taxed as a subchapter S corporation where the corporate income and loss generally flows out to the shareholders. A corporation still has to file separate federal and state income tax returns. More annual costs.

An LLC is not a corporation.

Yes, actually you are correct and I am wrong - a LLC is not a corporation and I don't really know the full tax ramifications, I'll just have to trust my accountant there. I do know an insurance policy will treat an LLC as a person - I was erroneously thinking in insurance terms and not tax terms. I would never form a C-Corp for such a small entity, that would not make any sense at all. I will start as a LLC and if I really grow I will convert to a S-Corp. My S Corp works perfectly for my insurance agency I own, but there is much more upfront cost for a S-Corp.

 

[timover5969]

I don’t believe Floria cares with who owns it or the entity which owns it or where the owner is but again, only Florida can tell you definitively.

Thank you Don

 

[Rick Webb]

I have a 25 ton master captain license with sailing and towing endorsements. I probably should have noted that in my original post. I am also an ASA certified instructor for ASA 101, 103, 104, 105, 106 and 114 certifications. However, this will be the first time teaching on a boat I own as opposed to a boat owned by a sailing school.

I'm thinking I'll probably just document the boat with the USCG with the LLC as the owner. I think that may solve the whole "where to register it" question. I'm new to this owning a boat for commercial use thing - does anybody see a problem with just having the boat documented?

I figured as much but thought it should be put out there.

Not sure it was put out there but in Florida a documented boat must still be registered. It is not a requirement to display numbers on the side and there are additional options on where the registration sticker goes but it is still a requirement. Not sure there are any advantages to documenting over titling in Florida unless you plan on taking the boat out of the country, or in some instances getting the boat financed USCG documentation may be required.

 

[sesmith]

@ Rick Webb

I've been thinking on this one a lot. I presently work in S.C. but have family and property in VA. The boat is on its trailer here in SC but... I will probably do a week or more each summer (ON THE BOAT-24/7) in VA. As far as total hours of sailing, I expect I will spend more time on the boat in VA. But the boat will physically spend more time in SC. It would not be such a quandry except SC has really high taxes on boats and I have another year left on my boat registration in VA.

Concerning SC, if you are visiting from out of state you have a period of time you can keep a boat in SC without having to pay SC taxes on the boat and register it there. The amount of time varies by county, so check with your local county (180 days in Charleston county). However, if you are a resident of SC and your boat is registered elsewhere, there is no grace period and it is supposed to be registered in the state as soon as you bring it down there. If you're actual residence is in Va, I'd keep it registered there. Once you register it in SC, it may be difficult to prove to them you have it elsewhere unless you sell it.

If you keep it on the water in Charleston, I've been told there are people whose call in life is to roam the docks and turn in any out of state boats that have been in the area too long,

 

[timover5969]

I figured as much but thought it should be put out there.

Not sure it was put out there but in Florida a documented boat must still be registered. It is not a requirement to display numbers on the side and there are additional options on where the registration sticker goes but it is still a requirement. Not sure there are any advantages to documenting over titling in Florida unless you plan on taking the boat out of the country, or in some instances getting the boat financed USCG documentation may be required.

Thank you Rick - this info is exactly the kind of info I was looking for when I posted my question! Very good to know.