Documented Sailboat

[CaptainK]

My mind draws a bank on that one, Kai. No clue. But, my mom said that back plates was the thing a long time ago. And I vaguely remember it.

Regards,

Kevin
CaptainK

[capt lar]

i just received back my certificate of documentation. takes a couple of months. when we talk about who benefits from documentation, i made an interesting discovery. along with my cert, i received a copy of the now recorded mortgage papers i signed when we closed. we financed part of the purchase. i received written instruction that i must have a copy of the preferred ship's mortgage on board at all times, and post a little blue card that declares the mortgage and states that no one else has the right to place a lein, except for crew's wages and salvage. the cert has to be renewed each year, so i assume i would send notice of discharge of mortgage at renewal and they would amend their records. i guess it makes sense that the cert is really a title, proof of ownership, and does not list the lein, so they want the lein declared as well. when this thread asked the benefit, it suddenly became clear to me who is being protected, it is the owners, but not me.

other insights - the fine for operating with invalid papers is $10,000. the city AND state shall be displayed in hailing port markings, a document bearing only a recreational endorsement may not be used for any other purpose (charter w/ OUPV - special documentation ?), state and local officials have the right to board documented vessels

if the boat was not previously documented, i am not sure i would go this route, but i now understand why lenders think it is a great idea. not sure what it does for me.

capt. lar

"state and local officials have the right to board documented vessels"
This is one matter of contention. I have heard the contrary. I have not dealt with it personally, but I know of several locals who have refused access to local cops to a documented vessel. The response has been that the local cops have called the coast guard to come out and accompany them on the boarding. I do not know the law on this one, but it makes sense (to some degree). In this area, I have seen first hand that the local law enforcement has no idea of what the law is when it comes to boats, and tends to lean towards caution when dealing with them. Rather than find out if it is within their juristiction, they simply comply with the request to have the coasties present.
A benefit to limiting the ability to attach leins to the boat, is that a harbor can not as easily seize a documented vessel for back slip fees. This does not mean they can't, but it does mean more paperwork, and allot of harbors do not feel it is woth it.
I am still not sure how I feel about documenting vs state registration, but there are benefits on both sides. The real concern I have is other countries. Will they recognize a state registration as proof of ownership. I have heard stories that some countries, Mexico being one of them, will not. Unfortunately, the only way to find out for sure is to experience it. Could be a very costly mistake.

[capt lar]

kai nui - i thought you would like that. to me it seems inappropriate for federal doc to be telling anyone anything about a specific state's laws. they could have said "may have" or "are not limited in their right". they did not back up the statement with any ref. to law. the lein thing does not bother me, but they were talking about leins that affect the lender (at length), not me. again - what do i get ? a little blue card. think i will post it in the head.

i hope someone has feedback on the charter issue. i know several 6 pack captains that think OUPV license and appropriate insurance is all you need, but their boats are not documented. a $10,000 fine could end a small charter business fast.

capt. lar

Yea, you got my hackles up
You are correct about the charter registration. The endorsement reqired is a Coastwise under charter endorsement.
Coastwise Endorsement: A qualification that allows a documented vessel to engage in the transportation of passengers or freight between U.S. ports. Must be shown on the "Certificate of Documentation".

The NVDC website is very helpful on some of this.

[KevinE]

This is a little off topic but is there a way to get federal US documentation on a vessel when you are not a US citizen (I am a Canadian looking to buy a boat in the US and will leave it there for a year or two prior to leaving on a 2 year sabattical through the caribbean, bring is back to the US and sell it there)?

The main point of my question being that I am trying to avoid/minimize sales tax - if I import the boat into canada I would have to pay duty (I read somewhere that Canadian Coast Guard requires survey from one of their pre-approved surveyors to establish the boat value and hence the amount of tax payable - I don't know if this is true).

My other spin is I want to buy the boat through the business (canadian) that I that I own.

Kevin

[capt lar]

as kai nui suggested - the "national vessel documentation center" web site - "frequently asked questions" has some of this. i don't think the site is very good. i found what i was after, only because kai nui told me what i was looking for, but they do discuss your issues.
capt. lar

OK Kevin, right from the NVDC Web site.
"The basic requirements for documentation are to demonstrate ownership of the vessel, U.S. citizenship, and eligibility for the endorsement sought. "
AND

"Citizenship is established by completion of form CG-1258. In addition to individuals, corporations, partnerships, and other entities capable of holding legal title may be deemed citizens for documentation purposes. Corporations must be registered in a state or the U.S; the chief executive officer and chairman of the board of directors must be U.S. citizens, and no more than a minority of the number of directors necessary to constitute a quorum may be non-citizens. In addition, at least 75% of the stock must be vested in U.S. citizens for a coastwise or fisheries endorsement. "
May I suggest "plan B"
You might look into the state registration option. I do not know for sure if this will get you around any of the tax issues, but if you have an established US address, the boat can be removed from documantation, and state registered. Refering to my earlier post, and especially since you will not be a citezen of the country where your boat is registered, you may have problems in foreign ports.

[capt lar]

delaware comes to mind.

Here is another helpful link. They have a good glossary of terms.
http://www.marinetitle.com/glossary.htm
Not sure I got the Delaware thing, but I do remember from my truck driving days that that was a Communist, I mean Commonwealth state. Something to do with it?

[capt lar]

delaware is a popular state for people to set up corporations that don't do anything. lots of boats are registered out of delaware because they are owned by these corporations. they have probably never been there. tax deal for those with money.

here are some benefits -
1. Delaware is considered the most attractive state in the nation for organizing.
2. Delaware courts have a reputation of reaching reasonable and fair conclusions when construing the corporation laws.
3. Only one incorporator is required. A corporation may be the incorporator.
4. There is no minimum capital requirement.
5. The franchise tax compares favorably with that of other states.
6. For companies doing business outside of Delaware, there is no corporation income tax.
7. Delaware has no sales tax, personal property tax or intangible property tax on corporations.
8. No taxation upon shares of stock held by non-residents and no inheritance tax upon non-resident holders.
9. A corporation may keep all of its books and records outside of Delaware.
10. You may have a principal place of business/address outside of the State of Delaware as well. (Depending on the nature of your business activities, qualification to do business in your state as a "foreign" corporation may be required. Please check with your local authorities).

This type of communism could have worked. Mass is the opposite - we waive, deduct, reduce, adjust nothing when it comes to taxes. Better than it was, but that is probably because it got to the point where politicians couldn't go outdoors - health risk.
capt. lar

[capt lar]

this is my favorite - "only one incorporator is required. A corporation may be the incorporator'

it incorporated itself. can a canadian do this ? and own a real nice boat ? oh i bet they do.

capt. lar

OH Yea... Right after I posted that I remembered hearing about Delaware as an option for such things. Been a few years, and for corporations, Nevada has become a good option out here.
Surprising how many politicians like to play the finger in the flame game.

[capt lar]

los vegas nevada gotta look a little iffy on the stern, but hey they do it out of new hampshire too and i don't think they brought that 40 footer down the concord river - dams. you do actually need to be a resident. with delaware, you don't even have to live there.

That is one of the absurd things about the documentation procedures. Your home port can be anywhere. It can be Tempe Az if you want. The boat never has to go there, and you do not have to live there. So, What purpose does it serve?