Yeh, I may have to go visit one of these guys. Thanks Mike and Tugted. No more dopamine questions for now!!! That’s funny Mike.
Ian Harle
22 ft Sisu hardtop downeaster
Dorado,
No problem at all. Those are pretty mundane and perfectly valid questions, actually, and you’re wise to be thinking about it now, instead of after the fact, when it’s too late.
In my opinion, your friends are right in advising you to setup an LLC or S-corporation. I’m not a lawyer, but lawyers will tell you that setting up the LLC or corporation can give you a “corporate veil”, which provides some legal separation between the liability exposure of your business endeavors and your personal estate in case of a law suit. Some may consider a solid insurance policy to be enough protection, but if you want another level of protection, and are willing to do a little leg work, go with the LLC or corporation. That’s what I would do, personally. The LLC is the easier of the two setup and to maintain, but I think there are also some relatively new laws that make maintaining an S-Corporation’s veil easier than it used to be, per advice from attorneys I know.
This will add some complexity, of course. For example, other than the work of setting up the company and maintaining the records (which isn’t hard), if you go with an LLC or S-Corporation, you’ll also have to decide whether to sell or lease the boat to your new company (in my opinion, at least). For tax and liability reasons, I would recommend doing one or the other (preferring to sell it to the company), but I’m not a lawyer or a CPA, so I’ll leave it at that, except to give you a few personal opinions (not professional legal or accounting advice) and some insurance advice. I prefer to title the boat in the company’s name and insure it thusly, with your name as an additional insured, and listed captain/named operator. This involves tranferring ownership of the boat to the company. If you title the boat in the company’s name, then it may also be of strategic value to finance the boat. You could also sell the boat to the corporation and hold a note on it back to yourself (i.e., owner-finance it to your company or make a stockholder loan for
Lee he set up my LLC for me & has helped me set up my business as well.
21 Contender
Thank you lee for a very comprehensive answer. All this stuff seems complicated but you spelled it all out very clearly. Like any endevour it’s one of those things you have to cut into bite sized pieces and just chip away at it. I think I’m gonna print this page out. See yah on the water.
Ian Harle
22 ft Sisu hardtop downeaster
And if you ever need an Attorney who specializes in maritime law…you could do no better…
Mike Crouch
Sea Tow Charleston
843-881-8949
Sea School Charleston
843-747-1000
www.seatow.com
www.seaschool.com
quote:
Originally posted by TugtedLee he set up my LLC for me & has helped me set up my business as well.
21 Contender
Cool. Thanks, Ted. Good to know that. I didn’t know if he preferred to do that kind of work or not.
But now that I know he does, I’ll remember that and recommend him to people who ask me about stuff like this.
Give Scott a call if you need legal help on this, Dorado. He’ll treat you right.
Gotcha Covered,
Lee Strickland
Strickland Marine Insurance, Inc.
843-795-1000 / 800-446-1862
OK, one more question since this keeps coming up. Does the weight or # of people take precedence (or the lowest of the two) for insurance purposes. I routinely take kids/families in my boat which is rated for 8 people but there may be 10 people on the boat. Usually 6 of these are kids and 4 adults. The weight on the boat is much less than if I had 8 guys my size on the boat (or even 6 guys)…Am I putting myself in jeopardy of not having the insurance coverage if something happens?
Again…Lee can probably tell you whats happens on the insurance side of things…
what i teach in class is usually this:
boat length (ft) times beam divided by 15…so if you have a 20’ boat with an 8’ beam than your max persons would be 10.6…and thats 150lbs/person…so if bubba weighs 300lbs/he counts for 2 people…
its based on stability…
you wanna keep it real simple?..only carry as many persons for what you have seats for…and don’t be the boat i saw today with 13 people on it…listing to the right so bad the guy trying to steer it really could not stay in a straight line…
Mike Crouch
Sea Tow Charleston
843-881-8949
Sea School Charleston
843-747-1000
www.seatow.com
www.seaschool.com
I understand your point that this could be a matter of interpretation of posted limits, but that is also exactly why I recommend that you honor every posted limit and not make judgment calls that are questionable, because an insurance company, an adjuster, a judge, a surveyor, a DNR officer, an attorney, and/or a jury might interpret the limit differently than you did and make your life very difficult. Their opinions would matter a lot more than mine if the rubber hit the road, so to speak, and I would, therefore, go with the most conservative interpretation at all times, and eliminate concern. Every marine insurance policy contains a section requiring you to take all reasonable precations and maintain the vessel in a seaworthy condition. Pushing the limits could definitely be construed as breeching those terms, so play it safe, and you won’t be sorry. Just remember the hot-coffee case, where it was determined that McDonald’s was at fault because the coffee was too hot; don’t put yourself in the position of being at the mercy of interpretation.
Gotcha Covered,
Lee Strickland
Strickland Marine Insurance, Inc.
843-795-1000 / 800-446-1862
Also remember that rated weight capacity includes gear, etc.
Furthermore, the following boat education site interprets the limits as follows:
“You should not exceed EITHER the stated maximum weight capacity OR the maximum number of people.”
http://www.boat-ed.com/wa/course/p2-1_knowyourcapacity.htm
Bottom line: don’t push the limits, and you’ll be better off.
Gotcha Covered,
Lee Strickland
Strickland Marine Insurance, Inc.
843-795-1000 / 800-446-1862