A non US citizen with Delaware registration flys what flag?

[DotDun]

Originally Posted by Cadence

LLC is a limited liability corporation. It keeps your personal assets safe. It does require officers. I think the advantage in Del. is a tax consideration. Unfortunately I've never had an 80' yacht.

Correct. An LLC in Florida costs $125 to setup and $138.75 a year to maintain. Florida wants the 'Articles of Organization' plus the Federal EIN (which is free), and this is public information, showing the 'Registered Agent' and 'Managers' (those capable of signing on behalf of the company). The 'Operating Agreement' is a private (as in not public information) contract between the owners/management. The USCG 'may' (as in I don't know for sure) ask for a copy of the Operating Agreement before accepting to document the vessel. FWIW, most banks require a copy of the Operating Agreement before opening an account in the name of the business.

[Zven]

Originally Posted by Cadence

LLC is a limited liability corporation. It keeps your personal assets safe.

"Safe" is a bit of a stretch though ... I think it is more correct to say "isolated".

A core purpose of setting up a corporation is to isolate some assets and liabilities from the owners... so if either an asset or a liability or an owner gets in trouble, they would not all go up in flames. At least not all at the same time :-)

[Jammer]

Originally Posted by belizesailor

Many do cruise on State registrations. I think the USCG Documentation form is just more widely familiar to officials and thus less likely to raise eyebrows...Ive seen some State registrations that arent much more than a cash register receipt.

Locally (Minnesota), the registration system exists mainly to collect taxes and operate a title system so that boats can be used as collateral on loans. Requirements are minimal. You could register a bathtub here if you had a bill of sale for it.

[hellosailor]

OK, Zven. The IRS agents, enrolled agents, tax attorneys that I have known over the years have all been full of misinformation and intentionally lied to me about all these things. You're right, it must all be wrong. And the "sham corporations" that they have declared a fraud and prosecuted the real owners of, also are just lies, disinformation meant to scare the public into complaince.
The guy who didn't pay taxes? Sorry, I was unclear. He failed to file the legally required returns on his substantial income for over 20 years. Not just failing to report the cash, but failing to report it all. And yes, he was legally required to do so. Apparently got away with it.

Your experience with those agencies and their employees and agents may vary. I have good reason to believe the ones I've known. (And no, they weren't engaged in official transactions with me at the time, beyond buying each other a beer or such.)

[Cadence]

Originally Posted by Zven

"Safe" is a bit of a stretch though ... I think it is more correct to say "isolated".

A core purpose of setting up a corporation is to isolate some assets and liabilities from the owners... so if either an asset or a liability or an owner gets in trouble, they would not all go up in flames. At least not all at the same time :-)

It's if the business gets sued or goes tits up the "partners' are not liable for their personal assets. If one partner gets his ass in a crack that's his problem. It has nothing to do with an LLC.

[DotDun]

Originally Posted by hellosailor

OK, Zven. The IRS agents, enrolled agents, tax attorneys that I have known over the years have all been full of misinformation and intentionally lied to me about all these things. You're right, it must all be wrong. And the "sham corporations" that they have declared a fraud and prosecuted the real owners of, also are just lies, disinformation meant to scare the public into complaince.
The guy who didn't pay taxes? Sorry, I was unclear. He failed to file the legally required returns on his substantial income for over 20 years. Not just failing to report the cash, but failing to report it all. And yes, he was legally required to do so. Apparently got away with it.

Your experience with those agencies and their employees and agents may vary. I have good reason to believe the ones I've known. (And no, they weren't engaged in official transactions with me at the time, beyond buying each other a beer or such.)

Originally Posted by hellosailor

.....
As for using corporate shells to allow aliens to federally document a vessel in the US? I've seen the sections of the US Code (USC) and they're very clear about it. There's a longer formula about stock allocations and the like, but basically it comes down to "51% or more of the stockholders MUST BE US CITIZENS" and anything else is a sham and a fraud, and will be revoked and prosecuted when and if caught.

Now, I can pay fifty folks at the welfare office $50 each and tell them "Sign here, you are a director and stockholder, I never want to hear from you again" and voila, I've got 50 citizens as stockholders.

And it might work for fifty years. But if one of them squawks....There's goes my boat, here comes my subpeona and bench warrant.

But by all means...use a private LLC to defeat the rules. I know one guy who went 20 years without filing income taxes, either.

Please do show us a link to these sections of the US code that you've seen regarding USCG Documentation of a recreational vessel....???? Can't find it?

[Dockhead]

Originally Posted by hellosailor

OK, Zven. The IRS agents, enrolled agents, tax attorneys that I have known over the years have all been full of misinformation and intentionally lied to me about all these things. You're right, it must all be wrong. And the "sham corporations" that they have declared a fraud and prosecuted the real owners of, also are just lies, disinformation meant to scare the public into complaince.
The guy who didn't pay taxes? Sorry, I was unclear. He failed to file the legally required returns on his substantial income for over 20 years. Not just failing to report the cash, but failing to report it all. And yes, he was legally required to do so. Apparently got away with it.

Your experience with those agencies and their employees and agents may vary. I have good reason to believe the ones I've known. (And no, they weren't engaged in official transactions with me at the time, beyond buying each other a beer or such.)

Jesus, you guys still discussing this?

"Sham" in this sense is a TAX question. Has nothing to do with what we were discussing. The TAX code allows the IRS to ignore the form of certain transactions if they are intended for the EVASION of taxes.

A company set up to hold ownership of a boat is not a "sham". It's a perfectly legitimate use of a company. Holding a single asset for different purposes, including nationalization. I guess half the companies in the world are used like this.

Did any of you actually call or write the Coast Guard Documentation Center as was suggested? They will set you straight.

[Zven]

Originally Posted by Cadence

It's if the business gets sued or goes tits up the "partners' are not liable for their personal assets. If one partner gets his ass in a crack that's his problem. It has nothing to do with an LLC.

It also works the opposite way. Say, if three partners own a boat just on mutual understanding and there is no registered corporation in place... Then, what if one of them gets into trouble for unrelated reasons? Think divorce. The vessel could be very much at risk.
If the partners had a corporation in place, only the shares in it would be at risk, and those could presumably be liquidated or otherwise managed without directly affecting the boat.

[DotDun]

Originally Posted by Cadence

It's if the business gets sued or goes tits up the "partners' are not liable for their personal assets. If one partner gets his ass in a crack that's his problem. It has nothing to do with an LLC.

The partners can be found liable if negligence can be proven. IOW, one can't use the veil of an LLC to do stupid things.

[Cadence]

113 & 114 are probably legit points. Kind of thinking in reverse. I've only thought of it as if the business was sued. Is an officer in a LLC actually a partial owner? I guess that
's a question for the guys that get the big fees.

[belizesailor]

Originally Posted by Cadence

113 & 114 are probably legit points. Kind of thinking in reverse. I've only thought of it as if the business was sued. Is an officer in a LLC actually a partial owner? I guess that
's a question for the guys that get the big fees.

Officers/Managers do not have to be share holders, but commonly are.

[Cadence]

Originally Posted by belizesailor

Officers/Managers do not have to be share holders, but commonly are.

Small LLCs generally have not much more than possibly some equipment as real property. One established for the original question involving a boat for tax purposes I guess the craft is. Seems hardly worth the effort establishing one in Del. for the average Joe without a multimillion dollar yacht.

[RPZ]

Originally Posted by belizesailor

Part of yes, but technically it is a State registered boat, not Federally Documented. There is a loophole in Delaware law which allows foreign ownership of Delaware registered boats. A foreign owned boat cannot legally be Federally Documented. Thus the delima.

For the purposes of international law it is still a United States vessel. In U.S. territorial waters it doesn't matter. Out on the open seas or entering the waters of a foreign nation it does matter.

[Cadence]

Originally Posted by RPZ

For the purposes of international law it is still a United States vessel. In U.S. territorial waters it doesn't matter. Out on the open seas or entering the waters of a foreign nation it does matter.

It may be an issue that the State Department is more easily gotten into any jam someone may get into, warranted or not. I was advised to get a passport when all you needed for the Bahamas was a drivers license for that reason.

[RPZ]

Originally Posted by Cadence

What flag do South Africans fly. They have no registration, or didn't. Most seem to fly the flag or the Netherlands because of dual citizenship at birth. At one time the SA flag was not popular in some parts of the world, doing a circumnavigation.

Sheesh, a free country. How do I become an Honorary SA citizen so I don't need to pay for registration of my boat?